U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

21–825 PDF 2005

S. Hrg. 109–186

THE CONTAINER SECURITY INITIATIVE AND

THE CUSTOMS-TRADE PARTNERSHIP AGAINST

TERRORISM: SECURING THE GLOBAL

SUPPLY CHAIN OR TROJAN HORSE?

HEARING

BEFORE THE

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MAY 26, 2005

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

TRINA D. TYRER, Chief Clerk 

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

NORM COLEMAN, Minnesota, Chairman 

TED STEVENS, Alaska 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

RAYMOND V. SHEPHERD, III, Staff Director and Chief Counsel 

BRIAN M. WHITE, Professional Staff Member 

ELISE J. BEAN, Minority Staff Director and Chief Counsel 

LAURA E. STUBER, Minority Counsel 

MARY D. ROBERTSON, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Coleman .............................................................................................. 1

Senator Levin .................................................................................................... 5

Senator Collins ................................................................................................. 7

Senator Akaka .................................................................................................. 9

Senator Lautenberg .......................................................................................... 10

Senator Carper ................................................................................................. 33

WITNESSES 

THURSDAY, MAY 26, 2005

Hon. Robert C. Bonner, Commissioner, Customs and Border Protection, U.S. 

Department of Homeland Security ..................................................................... 12

Richard M. Stana, Director, Homeland Security and Justice Issues, U.S. 

Government accountability Office ....................................................................... 37

Stephan E. Flynn, Commander, U.S. Coast Guard (Ret.), Jeane J. Kirkpatrick 

Senior Fellow in National Security Studies, Council on Foreign Relations, 

New York, New York ........................................................................................... 40

C. Stewart Verdery, Jr., Principal, Mehlman Vogel Castagnetti, Inc., Adjunct 

Fellow, Center for Strategic and International Studies, and Former Assistant Secretary of Border and Transportation Security Policy, U.S. Department of Homeland Security ................................................................................. 43

ALPHABETICAL LIST OF WITNESSES

Bonner, Hon. Robert C.: 

Testimony .......................................................................................................... 12

Prepared statement with attachments ........................................................... 53

Flynn, Stephen E.: 

Testimony .......................................................................................................... 40

Prepared statement .......................................................................................... 94

Stana, Richard M.: 

Testimony .......................................................................................................... 37

Prepared statement .......................................................................................... 66

Verdery, C. Stewart, Jr.: 

Testimony .......................................................................................................... 43

Prepared statement .......................................................................................... 102

EXHIBITS 

1. High-Risk Shipments and Exams Conducted at Selected CSI Ports 2004—

CSI Ports: Hong Kong, Yokohama, and Le Havre, chart prepared by 

the Permanent Subcommittee on Investigations ........................................... 108

2. High-Risk Shipments and Exams Conducted at Selected CSI Ports 2004—

CSI Ports: Durban, Gothenburg, and Rotterdam, chart prepared by the 

Permanent Subcommittee on Investigations .................................................. 109

3. Status of Validating C-TPAT Members as of April 15, 2005 (Not Validated/Validated), chart prepared by the Permanent Subcommittee on 

Investigations .................................................................................................... 110

4. C-TPAT Membership Process, chart prepared by the Permanent Subcommittee on Investigations ............................................................................ 111

5. Status of Validating C-TPAT Members as of April 15, 2005 (Nonimporters/Importers), chart prepared by the Permanent Subcommittee 

on Investigations ............................................................................................... 112

6. Photograph of the Port of Hong Kong ............................................................. 113

Page

IV

7. Photograph of Heimann Mobile x-ray at the Port of Felixstowe, England .. 114

8. U.S. Government Accountability Office (GAO) Report to Congressional 

Requesters, CARGO SECURITY—Partnership Program Grants Importers 

Reduced Scrutiny with Limited Assurance of Improved Security, March 

2005, GAO-05-404 ............................................................................................. 115

9. U.S. Government Accountability Office (GAO) Report to Congressional 

Requesters, CONTAINER SECURITY—A Flexible Staffing Model and 

Minimum Equipment Requirements Would Improve Overseas Targeting 

and Inspection Efforts, April 2005, GAO-05-557 ............................................ 154

10. Responses to supplemental questions for the record submitted to Robert 

C. Bonner, Commissioner, U. S. Customs and Border Protection, Department of Homeland Security ............................................................................. 204

11. Responses to supplemental questions for the record submitted to Richard 

M. Stana, Director, Homeland Security & Justice Team, Government 

Accountability Office ........................................................................................ 215

12. Photograph and x-ray image taken at a Michigan port of a container 

carrying Canadian trash .................................................................................. 217 

(1)

THE CONTAINER SECURITY INITIATIVE 

AND THE CUSTOMS-TRADE PARTNERSHIP 

AGAINST TERRORISM: SECURING THE 

GLOBAL SUPPLY CHAIN OR TROJAN HORSE? 

THURSDAY, MAY 26, 2005

U.S. SENATE,

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 9:32 a.m., in room 

SD–106, Dirksen Senate Office Building, Hon. Norm Coleman, 

Chairman of the Subcommittee, presiding. 

Present: Senators Coleman, Collins, Levin, Akaka, Carper, and 

Lautenberg. 

Staff Present: Raymond V. Shepherd, III, Staff Director and 

Chief Counsel; Mary D. Robertson, Chief Clerk; Brian M. White, 

Professional Staff Member; Leland Erickson, Counsel; Mark Nelson, Counsel; Katherine Russell, Detailee (FBI); Jeffrey James, 

Detailee (IRS); Richard Fahy, Detailee (ICE); Elise J. Bean, Staff 

Director and Chief Counsel to the Minority; Laura E.Stuber, Counsel to the Minority; Eric J. Diamant, Detailee (GAO); Merril 

Springer, Intern; and Adam Wallwork, Intern. 

OPENING STATEMENT OF SENATOR COLEMAN 

Senator COLEMAN. This hearing of the Permanent Subcommittee 

on Investigations is called to order. Good morning and thank you 

all for being here today. 

Today’s hearing presents the first opportunity for this Subcommittee to examine key homeland security programs under the 

recently restructured full Committee on Homeland Security and 

Governmental Affairs. I look forward to working collaboratively 

with the full Committee and holding several additional oversight 

hearings on homeland security in the future. 

After September 11, unfairly or not, Customs and Border Protection (CBP) was thrust onto the front lines of our war on terrorism. 

CBP was placed in the untenable position of having to transform 

itself overnight—from an agency focused on interdicting guns, 

drugs, and money—to the agency chiefly responsible for protecting 

us against a chemical, biological, radiological, or nuclear attack. 

Commissioner, I want to thank you for your efforts to date in leading this transformation. 

2

Today’s hearing will focus on the Federal Government’s efforts to 

secure maritime commerce and the global supply chain. In early 

2002, U.S. Customs and Border Protection launched both the Container Security Initiative (CSI), and the Customs-Trade Partnership Against Terrorism (C–TPAT), to address the threat of terrorism and the security of the global supply chain. These programs 

were, and still are, the right concepts for security in our new threat 

environment. Under the leadership of Commissioner Bonner, CBP 

aggressively implemented these programs, rather than endlessly 

debate the details here in Washington. That accomplishment alone 

is worth applauding. 

However, these programs have been in existence for over 3 years 

and it is time to start asking some tough questions and identifying 

how we can improve upon these promising concepts. While I believe 

these programs are indeed the right concepts, our oversight investigation into these programs has revealed significant shortcomings 

that we will address here today. In concert with our efforts, the 

Government Accountability Office (GAO), conducted two extensive 

audits of these programs. These reports reveal some significant 

problems and outline the substantial work that is required to transition these promising initiatives into effective and sustainable programs. 

As Secretary Chertoff stated at a full Committee budget hearing 

in March, ‘‘the worst thing would be this: To have a program for 

reliable cargo that was insufficiently robust so that people could 

sneak in and use it as a Trojan Horse. That would be the worst 

of all worlds.’’ Rest assured that PSI will conduct the necessary 

sustained oversight to strengthen these programs and ensure that 

they are not used as a Trojan Horse by those whose very raison 

d’etre is to destroy us. 

If there was one thing my colleague, Senator Kerry, and President Bush agreed on in their debates this past fall, it was the 

threat of nuclear terrorism. When both were asked about the ‘‘single most serious threat to the national security of the United 

States, Senator Kerry responded, nuclear proliferation, nuclear proliferation.’’ In response, President Bush concurred and told the audience, ‘‘I agree with my opponent that the biggest threat facing 

this country is weapons of mass destruction in the hands of a terrorist network.’’

Senator Kerry and President Bush agreed because the stakes are 

so very high. In a recent estimate, a 10 to 20 kiloton nuclear weapon detonated in a major seaport would kill between 50,000 to one 

million people and result in direct property damage of $50 to $500 

billion, losses due to trade disruption of $100 billion to $200 billion, 

and indirect costs of $300 billion to $1.2 trillion. This is unfathomable and demonstrates why these programs are essential to homeland security. 

Recently, Director Robert Mueller, ominously assessed the terrorist threat at the annual Global Intelligence Briefing by stating 

he is concerned ‘‘with the growing body of sensitive reporting that 

continues to show al Qaeda’s clear intention to obtain and ultimately use some form of chemical, biological, radiological, nuclear, 

or high-energy explosives in attacks against America.’’

3

Many terrorism experts believe that maritime container shipping 

may serve as an ideal platform to deliver these weapons to the 

United States. In fact, we recently saw that containers may also 

serve as ideal platforms to transport potential terrorists into the 

United States. This was demonstrated on January 15 and again on 

April 2 this year, when upwards of 30 Chinese immigrants were 

found emerging from containers arriving at the Port of Los Angeles. I know that the Chair, Senator Collins, was surveying that port 

and is very familiar with the situation. The individuals were actually not seen sneaking out of a container by the cameras, rather 

by an observant crane operator. The Subcommittee’s concern is 

that smuggled immigrants could include members of terrorist organizations and/or that the container could have contained a weapon 

of mass destruction. 

The Customs-Trade Partnership Against Terrorism, or C–TPAT, 

attempts to secure the flow of goods bound for the United States 

by developing voluntary partnerships with the trade community. 

C–TPAT members—primarily importers—commit to improving the 

security of their supply chain and provide CBP with their supply 

chain security profiles for review. In exchange for this commitment, 

CBP provides C–TPAT members benefits to include upwards of 

seven times fewer inspection of their cargo at U.S. borders. 

Our concerns with C–TPAT include, one, these substantial benefits, including fewer inspections, that are provided to importers before a thorough review or validation of their supply chain security 

profiles, and two, of those validations that occur, the process lacks 

what I would call rigor or independence. To me, a validation is an 

independent physical audit of the supply chain security plan provided to CBP. However, CBP views a validation as an opportunity 

to ‘‘share best practices’’ and explicitly states that ‘‘validations are 

not audits.’’

Furthermore, of the 2,676 certified C–TPAT importers receiving 

reduced inspections, only 6 percent, 179, have been validated. 

Hence, 94 percent of the C–TPAT importers currently receiving 

seven times fewer inspections have not had their supply chain security personally validated by a CBP officer. This is simply unacceptable. 

The Container Security Initiative (CSI) was implemented to enable CBP to target high-risk containers for inspection at overseas 

ports prior to their departure for U.S. ports. Currently operating in 

36 foreign ports, this program is based on the concept of ‘‘pushing 

out our borders.’’ While this concept is laudable and it is a good 

concept, a review of CBP data by this Subcommittee and GAO 

raises significant concerns. 

Many CSI ports are unable to inspect the quantity of containers 

necessary to significantly improve security. Our Subcommittee has 

identified some CSI reports that routinely ‘‘waive’’ the inspection of 

high-risk containers, despite requests by CSI personnel for an inspection. As a result, numerous high-risk containers are not subjected to an examination overseas, thereby undermining the primary objective and purpose of CSI. 

More specifically, CBP inspects approximately one-third of 1 percent of the total number of containers headed for U.S. shores from 

CSI ports. Equipment such as nuclear detection devices and nonVerDate 0ct 09 2002 11:43 Dec 05, 2005 Jkt 021825 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\21825.TXT SAFFAIRS PsN: PAT
4

1See Exhibits No. 1 and 2 which appears in the Appendix on pages 108 and 109 respectively. 

intrusive inspection machines used for overseas inspections are untested and are of unknown quality. And CBP is unable to compare 

the performance of one CSI port to another. 

And finally, Customs identified 1.95 percent of containers 

transiting through CSI ports in 2004 as high-risk, and that is not 

a bad thing. However, of those containers deemed high-risk, only 

17.5 percent are inspected overseas. 

Let me make the record clear. We have had a lot of discussion 

about numbers. CBP asserts that 90 percent of high-risk containers 

are inspected abroad, and when GAO states that 72 percent of 

high-risk containers are inspected abroad, they are referring to 

high-risk containers referred for inspection. When I state that only 

17.5 percent of high-risk containers are inspected abroad, I am referring to all containers designated high-risk by CBP. So you have, 

and there is a chart showing this,1 a number of containers designated high-risk, but then a smaller percentage which are designated for inspection, and I believe at least domestically here that 

we inspect all high-risk containers. And yet abroad, I think our figure of 17.5 percent is the valid figure. 

While these findings are troubling, Customs has already moved 

aggressively to improve these programs by fulfilling the recommendations of the GAO audits. These changes are encouraging 

and are worth highlighting. I look forward to Commissioner Bonner’s discussion of these substantial modifications. However, based 

on our oversight, I believe much work remains for Customs to build 

more robust and effective security programs—in partnership with 

industry—to confront the very real terrorist threat. This partnership will entail a transformation of the trade community, where security becomes embedded in the global supply chain. Instead of security being a cost of doing business, security needs to become a 

way of doing business. 

I want to take this opportunity to thank Ranking Member Levin, 

Chairman Collins, Senator Lieberman, and Representative Dingell 

for their support and interest in this important subject. Securing 

our Nation’s borders and ports demands a bipartisan and bicameral 

approach. I would also like to thank Richard Stana, of the GAO, 

and his outstanding team of Stephen Caldwell, Deena Richart, and 

Kathryn Godfrey for producing two insightful reports that will contribute to improving our homeland security. 

I would like to welcome and thank the Commissioner of U.S. 

Customs and Border Protection, Commissioner Bonner, the Director of Homeland Security and Justice Team at GAO. Richard 

Stana, Commander Steven Flynn of the Council on Foreign Relations, and Stewart Verdery, the former Department of Homeland 

Security Assistant Secretary for Border and Transportation Security for appearing before this Subcommittee today. I look forward 

to their testimony and an engaging hearing. 

With that, I would like to recognize my Ranking Member, Senator Levin. 

5

1See Exhibit No. 12 which appears in the Appendix on page 217. 

OPENING STATEMENT OF SENATOR LEVIN 

Senator LEVIN. Thank you very much, Mr. Chairman. I appreciate your effort, your energy, your commitment on a very difficult 

subject. It is an important security issue that we are addressing 

here this morning and the Chairman’s leadership in this effort is 

essential and I commend you for it. 

I also want to commend our other colleagues, as you have, including Congressman John Dingell, the dean of the House, for his 

ongoing interest in this issue and for the major contributions that 

he has made to the investigation. 

On September 30, 2004, President Bush said ‘‘the biggest threat 

facing this country is weapons of mass destruction in the hands of 

a terrorist network.’’ On February 16, 2005, Porter Goss, Director 

of CIA, or Central Intelligence, told the Senate, ‘‘It may be only a 

matter of time before al Qaeda or another group attempts to use 

chemical, biological, radiological, or nuclear weapons.’’ In 1998, 

Osama bin Laden declared that acquiring chemical or nuclear 

weapons ‘‘is a religious duty.’’ 

These types of statements show that blocking avenues that could 

be used to smuggle weapons of mass destruction into this country 

is of utmost importance to our security. Today’s hearing focuses on 

one of those avenues: The 23 million containers that enter the 

United States each year. 

The Container Security Initiative (CSI) and the Customs-Trade 

Partnership Against Terrorism (C–TPAT), are two programs designed by Customs as part of what it has called a multi-layered 

strategy to detect and prevent weapons from entering the United 

States through containers. The two reports being released today by 

the Government Accountability Office (GAO), have identified deficiencies in both programs and are the focus of today’s hearing. 

Container security has special significance to me because each 

year, over 3 million containers cross the Michigan-Canadian border, 3 million containers a year. Many of these containers carry 

municipal solid waste from Canada and enter Michigan by truck at 

three ports: Port Huron, Detroit, and Sault Ste. Marie. Each 

month, in one of those ports, Port Huron alone, approximately 

7,000 to 8,000 containers of Canadian waste enter Michigan across 

that border. 

Leaving aside the issue of why our Canadian neighbors are sending so much trash to my home State of Michigan each day, key 

question is whether our Customs personnel have the technology 

and resources necessary to inspect those containers and ensure 

that they are not carrying weapons of mass destruction into our 

country. 

One key type of detection equipment used to screen containers 

for security purposes uses X-rays to examine their contents. But Xrays of trash containers are usually unreadable—the trash is so 

dense and variable, that it is impossible to identify anomalies, such 

as weapons or other contraband. This photograph taken at a Michigan port of a container carrying Canadian trash illustrates the 

problem.1 Anything could be stashed in the middle of one of these 

6

trash containers, and our border personnel would have no way of 

detecting anomalies in the picture, and that is what they look for, 

anomalies. In trash, everything is anomalous. It is the definition of 

trash. 

The effectiveness of Customs detection equipment when it comes 

to trash containers is an issue that I have raised before with the 

Department of Homeland Security and other agencies and I raise 

it again today. The bottom line is that if we are relying on this 

equipment to detect WMD or other contraband in containers filled 

with trash, we are putting our faith in a faulty and limited system. 

We need to address that problem. 

The GAO reports raise a number of other very troubling container security issues that need to be addressed, and just a few of 

them, I will highlight here. 

First, inspection failures at foreign ports. The Chairman has addressed this issue and I will quickly summarize. One key problem 

identified in the GAO reports is the ongoing failure of the CSI program to convince foreign governments to inspect containers identified by U.S. personnel as high-risk cargo. I want to emphasize 

what the Chairman said. This is cargo we have identified as highrisk cargo. Now, the GAO found that 28 percent of the containers 

referred by U.S. personnel to a host government were not inspected. Maybe someone wants to argue over the percentage. I will 

stay with the GAO. But whether it is 10 percent, 20 percent, or 28 

percent, every one of those containers that are high-risk containers 

identified by us should be inspected. 

One out of four containers, according to the GAO numbers, identified by U.S. personnel as high-risk cargo were not inspected. If 

these high-risk containers are not being inspected overseas, then 

why are we letting them into the United States? 

Another issue is overseas personnel costs. Another issue of concern involves CSI staffing levels overseas, and whether we are 

spending a needless amount of money to maintain U.S. personnel 

at foreign ports. We obviously want U.S. personnel at foreign ports, 

but the idea that we are paying an average cost of $430,000 annually, per year, to keep each American overseas is amazingly high. 

It is a figure which is incredibly high to me, and the latest figures 

from Customs indicate there are currently 114 Customs employees 

overseas at 36 ports. 

Now, it is helpful to have that staff working directly with host 

nations, and I am all for it. We ought to do it at a much more reasonable cost than that, but I am all for it. But typically, only one 

or two CSI team members deal directly with the host government’s 

customs officials, while others work primarily at computers, analyzing data. The question is whether it is cost effective to place an 

entire CSI team at a port when only one or two individuals are personally interacting with foreign government personnel. 

Then we have the C–TPAT program. We have an automatic reduction in containers’ scores because of that Partnership Against 

Terrorism. The reduction in the score is automatic and the question 

is whether or not it should be, where you automatically ease inspection standards for each shipper that signs up for the program. 

Right now, as soon as the shipper files the application to become 

a C–TPAT member, Customs immediately reduces the shipper’s 

7

Automatic Targeting System (ATS) score by a sizeable amount of 

points, without any verification that a reduced score is appropriate. 

A sizeable, automatic point reduction is of concern because it 

may be enough to move a shipper from a high-risk category to a 

medium- or even low-risk category, reducing the chance that the 

shipper’s containers will be inspected, even if the shipper hasn’t yet 

met the program’s minimum security requirements, and that is the 

issue. C–TPAT members shouldn’t get the benefits of the program’s 

just for signing up. The shipper should also have to show that it 

is meeting the program’s security requirements to get the benefits. 

Customs carried on the approval at a fairly slow pace, and validating those plans has also been fairly slow. So after 3 years, Customs approved only about 50 percent of the security plans submitted by C–TPAT members and rejected about 20 percent. Of the 

approved plans, Customs has actually validated compliance for only 

about 10 percent, which means that almost 90 percent of the firms 

that are given reduced Customs scrutiny have never undergone a 

validation process showing that they are entitled to the reduced 

scrutiny. That is a large validation gap that invites abuse and we 

ought to try to correct it. It may be an appropriations issue, I am 

not sure. 

Finally, GAO has determined that DHS has no specified minimum technical requirements for the inspection equipment being 

developed and used at CSI ports and we need those standards in 

order to know whether the equipment being purchased is doing the 

job that needs to be done. 

It is an enormous problem, this container security issue which 

the Committee is addressing today. It is going to require an enormous effort to address, but again, I commend our Chairman for his 

leadership in addressing these gaps and addressing these problems. He is doing it for exactly the right reason, which is the security of this Nation. We want to be as positive as we possibly can 

be to give the assistance to Customs that they need to carry out 

these programs efficiently and effectively. 

Senator COLEMAN. Thank you, Senator Levin. I think it is interesting to note that Senator Levin, myself, and the Chairman all 

have States that are border States, and so these issues are particularly important. 

It is always an honor to have Chairman Collins here. This has 

really been her issue. She has personally vested time and energy 

in it. She has put it on the radar screen. She has been out to various ports, surveying the situation there, and so I just want to publicly thank her for her deep concern and leadership in raising these 

questions, and hopefully the work of the Subcommittee will assist 

her in her efforts to ensure greater security and greater safety for 

all our ports and borders. So with that, Chairman Collins. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. Thank you very much, Mr. Chairman. Let 

me commend you for your efforts to assess and improve the security of our vital maritime industry. 

You are correct that this issue is of great personal interest to me. 

I have long been concerned and convinced that our ports are one 

of our, if not the greatest, vulnerability that we have, and your 

8

hearing builds very well on previous oversight hearings that we 

have held at the full Committee. 

Coming from a State with the largest port by tonnage in New 

England, I am keenly aware of the importance of our seaports to 

our national economy. Ninety-five percent of U.S. trade, both imports and exports, moves through our seaports, and in the year 

2004, the value of these imports alone exceeded $600 billion. 

I also understand the link between maritime security and our 

national security. In my judgment, based on the work that we have 

done and supplemented by the excellent work of this Subcommittee, the weakest link in maritime security is the cargo container. It used to be when I would see a giant cargo ship come into 

a port, I viewed it as a marvel of the global economy. Now, I worry 

that one of those containers may include the makings of a dirty 

bomb, a group of terrorists, or even a nuclear weapon. 

In 2004, nearly 27,000 of these potential Trojan Horses entered 

our country each day through our seaports. That amounts to roughly 9.7 million containers in that year. We know that most of the 

inbound containers are transporting legitimate goods—TV sets, 

sneakers, or toys. But we also know that smugglers for years have 

exploited the vulnerabilities of our container system to smuggle in 

contraband, such as drugs, illegal aliens, and other illegitimate 

commerce. 

Given the current technology and the sheer volume of traffic, we 

simply cannot inspect every container without bringing trade to a 

standstill. We cannot follow every container through its global journey, nor can we track every container and every piece of cargo 

along the roads, rails, and airways that bring them to ports. No 

one nation can secure the international supply chain. 

The two programs we examine today are designed to make securing the supply chain exactly what it should be, a shared responsibility, a shared partnership between the public and private sectors, 

a shared responsibility among nations. 

While these programs are extremely well conceived, their level of 

success can only be described as modest. A substantial majority of 

our ports worldwide are not part of the CSI program. The overwhelming majority of private sector entities have not enrolled in 

C–TPAT. Terrorists are nothing if not opportunistic. These gaps in 

security may well be too wide to ignore. 

Equally troubling, however, are the indications that the CSI and 

C–TPAT agreements in place are not as strong in practice as they 

appear to be on paper, and both of my colleagues already outlined 

some of the GAO’s findings in this regard and we will hear from 

the GAO later today, so I won’t repeat it here. 

We should, however, recognize the fact that Customs and Border 

Protection was compelled to roll out these two programs very 

quickly during a time of great stress and uncertainty. Given the urgent need to take action against terrorism following September 11, 

it is understandable that these programs began with what is frequently called the implement and amend approach. In other words, 

get it started and fix the problems as they come up. 

We must ensure, however, that the problems are, indeed, identified and fixed. The consequences of failing to do so could be staggering. The West Coast dock labor dispute in the fall of 2002 cost 

9

our economy an estimated $1 billion for each of the 10 days that 

it lasted. It not only brought the affected ports to a halt, but it also 

harmed businesses throughout this country and among our international trading partners. And that astonishing amount of economic damage was the result of an event that was both peaceful 

and anticipated. 

Just think what a deliberate attack on one of our large ports, or 

even a small port, could do to our economy. It would bring it to a 

standstill. It would result in all seaports being closed down temporarily, and obviously, it could cause a significant loss of life. 

The use of the Trojan Horse analogy is apt. Earlier this year, as 

the Chairman indicated, I toured the Ports of Los Angeles and 

Long Beach. The size of these facilities and the amount of activity 

is just extraordinary to behold. But so, too, are the risks and the 

vulnerabilities they offer for terrorists to exploit. 

I saw from the air from a Coast Guard helicopter the enormous 

number of containers being unloaded from ships in these two ports. 

By coincidence, as the Chairman mentioned, my visit came immediately before 32 Chinese nationals were smuggled into the Port of 

Los Angeles on two cargo containers. Fortunately, that Trojan 

Horse held people seeking a better way of life, not terrorists seeking to destroy our way of life. 

They were caught, but what is particularly disturbing about this 

case is they were not caught due to any security initiative or the 

technology or extensive television network surveillance cameras 

that were in place, but rather, as the Chairman indicated, by an 

alert crane operator. It is also troubling that the same kind of incident happened a second time just a few months later. 

We cannot continue to rely on luck or even alert crane operators 

to provide for the security of our seaports, our Nation, and our people. 

Mr. Chairman, I look forward to hearing the testimony today. 

Senator COLEMAN. Chairman Collins, I again want to thank you 

for your leadership on this important issue. 

Senator Akaka. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you very much, Mr. Chairman. I am glad 

to join you in this hearing and I thank you for convening this hearing on the Container Security Initiative and the Customs-Trade 

Partnership Against Terrorism. These programs represent critical 

layers in the protection of American cargo and ports. 

Cargo security is especially important to my State of Hawaii because, as I noted in many previous hearings, Hawaii receives 98 

percent of the goods it imports via the sea. An interruption in sea 

commerce could have a staggering impact on the daily lives of the 

people in Hawaii. 

Last week, Department of Homeland Security Secretary Chertoff 

stated that we need to create a world that is banded together with 

‘‘worldwide security envelopes,’’ which he described as secure environments through which people and cargo can move rapidly, efficiently, and safely. Programs such as CSI and C–TPAT, which use 

voluntarily submitted information to focus scarce screening reVerDate 0ct 09 2002 11:43 Dec 05, 2005 Jkt 021825 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\21825.TXT SAFFAIRS PsN: PAT
10

sources on high-risk shippers and cargo should be the cornerstones 

of Secretary Chertoff’s vision. 

It is important not only to examine whether these programs 

function well, but how they will fit into Secretary Chertoff’s vision 

of a worldwide security envelope. I have yet to see details that convince me that DHS has executed the planning necessary to achieve 

such a coordinated global effort. 

Unfortunately, there is only minimal coordination of international programs across the Department. For example, there are 

Immigration and Customs Enforcement, ICE, agents investigating 

illegal customs activities in countries that have CSI ports, and yet, 

often the Customs and Border Protection and ICE teams—can you 

imagine this—do not talk to each other. 

CSI teams are scrubbing data daily, looking for anomalies relating to weapons of mass destruction, but we also must be concerned 

about drug smuggling, human trafficking, counterfeit goods, and 

invasive species. We need to ensure that our international partnerships are not program specific. 

DHS’s Office of International Affairs could play a critical role in 

coordinating operations abroad of the various entities within the 

Department. We need effective coordination to ensure that our various security programs are integrated and are mutually reinforcing. 

I look forward to the testimony of our witnesses, and thank you 

so much, Mr. Chairman. 

Senator COLEMAN. Thank you, Senator Akaka. Senator Lautenberg. 

OPENING STATEMENT OF SENATOR LAUTENBERG 

Senator LAUTENBERG. Thanks, Mr. Chairman, for holding this 

hearing. We have a duty in Congress to step back every once in a 

while and oversee how things are going. This is such an opportunity. 

I concur with your comments, Mr. Chairman, about the Chairman of the entire Committee. She has been very much interested 

and diligent about homeland security issues, so it is a welcome addition to the dialogue here that Chairman Collins is with us. 

In this case, I am afraid that the report card is one that will not 

make anyone particularly proud. The Administration has failed on 

port security. I’m concerned that if we review every program at 

DHS with the zeal that this Subcommittee shows here today, we 

might find even more frightening results. 

It has been almost 4 years since September 11 and we still inspect only 5.5 percent of all containers coming into the United 

States. Two programs, the Container Security Initiative and the 

Customs-Trade Partnership Against Terrorism, are aimed at detecting terrorist weapons brought to our country. But CSI has resulted in inspections of only 17.5 percent of high-risk cargo. 

The Customs and Border Protection may claim that they can 

only ask foreign countries to inspect for WMDs, but terrorists ship 

things other than weapons, too, like drugs, which are sold to pay 

for terrorist operations, and we rely on other nations to perform 

these inspections. We don’t have standards for the equipment that 

they use to inspect. We don’t even oversee some of these foreign inVerDate 0ct 09 2002 11:43 Dec 05, 2005 Jkt 021825 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 C:\DOCS\21825.TXT SAFFAIRS PsN: PAT
11

spections. In some cases, DHS personnel in the CSI program are 

stationed an hour away from where the actual loading takes place. 

There are big problems with the CSI program, as I expect our 

witnesses will discuss in more detail. The bottom line, however is 

that the Federal Government has not been doing enough to protect 

our citizens from container-borne threats. 

As for the C–TPAT program, it is alarming to me that after September 11, that the Administration would fashion a voluntary 

homeland security program to try and improve supply chains. If a 

voluntary program were all that was needed, then the industry 

could have done that on its own. If September 11 taught us anything, it should be the government has a duty to protect its citizens 

from terrorism, not simply rely on companies to upgrade security 

at isolated parts of a worldwide logistics system. 

We saw that very sharply in our inspection of cargo at the airports—the baggage screenage. The private sector was doing it as 

a business and doing it very poorly. I am pleased to say that I have 

seen marked improvements in those inspection routines. If the Administration knows what security measures should be taken to improve security of our logistics system, they should require them, 

not make them, optional. 

And finally, the Port Security Grant Program is now administered by the Office of Domestic Preparedness. Last September, the 

Administration announced a round of grants to help secure our 

ports. But those resources were not targeted to the ports that are 

most at risk, and it is a subject that I have discussed fairly frequently about security grants in general. Some of the grants went 

to facilities in Oklahoma, Indiana, and Kentucky, hardly the front 

lines of the war on terror, certainly not with the port presence that 

we have in the States that are represented here. 

I think it is just common sense that Port Security Grants should 

be based on risk, not politics. And I know that the Inspector General has agreed with my position. We cannot afford to play politics 

with port security. The consequences of failure are simply too 

great. 

Some 20 million people live near the New York-New Jersey port 

facilities, which are vulnerable to terrorist attacks. Hazardous materials move in and out of the port through pipelines and over 

roads and freight rail lines, and Newark Liberty International Airport is within a mile of the harbor or the port. So it is easy to 

imagine what is at stake for my State and the Nation if our port 

is attacked. 

I am upset with the failures of the Administration on port security and I hope these hearings this day will help illuminate the 

dangerous lapses and loopholes that leave our citizens at risk. I 

hope these hearings help us find solutions for moving forward. 

Thank you, Mr. Chairman. 

Senator COLEMAN. Thank you, Senator Lautenberg. 

I would now like to call our first witness for today’s hearing. It 

is my pleasure to welcome the Hon. Robert C. Bonner, Commissioner of U.S. Customs and Border Protection for the Department 

of Homeland Security. 

Commissioner Bonner, I appreciate your attendance at today’s 

hearing and look forward to your testimony regarding CBP’s efforts 

12

1The prepared statement of Mr. Bonner appears in the Appendix on page 53. 

to secure maritime trade and the global supply chain, and let me 

say up front, we recognize the enormity of the task. I believe there 

are over 9 million eight-by-eight cargo containers that enter this 

country annually, and so we are looking at needles in a very big 

haystack. I also want to publicly thank you for your efforts to date. 

We do recognize that strides have been made, tremendous improvements have been made. But certainly the purpose of oversight 

is to look at what we have and say, how do we make it better? The 

stakes are simply so high here, they are so high that, clearly, this 

is the kind of oversight that is needed. 

Before we begin, pursuant to Rule 6, all witnesses before the 

Subcommittee are required to be sworn in. I would ask you to 

please stand and raise your right hand. 

Do you swear that the testimony you are about to give before the 

Subcommittee is the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. BONNER. I do. 

Senator COLEMAN. We will be using a timing system today. I 

think the oral testimony should be no more than 10 minutes. When 

you see the amber light come on, come to a conclusion. But your 

entire testimony will be entered into the record as a whole. 

With that, Commissioner, please proceed. 

TESTIMONY OF HON. ROBERT C. BONNER,1 COMMISSIONER, 

CUSTOMS AND BORDER PROTECTION, U.S. DEPARTMENT OF 

HOMELAND SECURITY 

Mr. BONNER. I appreciate that, Mr. Chairman. I appreciate the 

kind words, and Senator Levin, Chairman Collins. I am very 

pleased to appear before the Subcommittee, Mr. Chairman, today 

to have this opportunity to discuss two very important initiatives 

of Customs and Border Protection and these are the Container Security Initiative and the Customs-Trade Partnership Against Terrorism, or C–TPAT. And I want to thank the Members of the Subcommittee for your support of CBP and the work that it does every 

day to help protect America and keep it safe, and by that, I mean 

the help that this Committee, the Subcommittee has given us to 

help secure our borders and our ports. 

I might also say, Mr. Chairman, that the GAO and this Subcommittee and the staff of the Subcommittee have offered over the 

course of time some very valuable suggestions to us and recommendations with respect to both CSI and C–TPAT, and I can 

tell you that we appreciate the interest and oversight, and we also 

have taken many of these suggestions and recommendations to 

heart because we have implemented a good many of them. 

These initiatives that I want to talk about a bit this morning, as 

you know, seek to add security to our country, but to do so without 

choking off the flow of legitimate trade that is so important to our 

economy. 

I would say one of the realizations that I had, and I am sure 

many people did on the morning of September 11, was that on that 

morning, the priority mission of U.S. Customs, now Customs and 

Border Protection, became national security. The mission became 

13

nothing short of doing everything that we could responsibly with 

the resources we have to prevent terrorists and terrorist weapons 

from getting into our country. 

But I will also say, having been there, that there was another 

realization that came to me the following day, on September 12, 

2001, and that is as important as it is that we increase our security 

and make it more difficult for al Qaeda and al Qaeda-associated 

terrorist organizations to be able to attack America and to get into 

this country or to get weapons into this country, we had to do that 

without shutting down our economy. On the morning of September 

11, U.S. Customs went to the highest security-level alert that existed at that time, short of actually just shutting down the ports 

of entry into our country. 

And the result as, by the next day, September 12, we had virtually shut down our border. The wait times at the Ambassador 

Bridge that comes from Ontario over to Detroit, the bridges into 

Buffalo from Canada, they literally froze up. We went from wait 

times on September 10 that averaged about 10 minutes to 12 hours 

by September 12 and September 13. 

And so it was important that we figured out, as best we could 

and as quickly as we could, how we did the security in a way that 

didn’t shut down our economy in the process, because I can tell 

you, by the 13th and 14th of September, as a result of the actions 

that we took, companies, many companies that relied on just-intime deliveries in the United States were ready to shut down their 

plants. In fact, a few plants of the major automobile manufacturers 

did shut down on September 14. 

So we have needed, as we have looked at this issue, to figure out 

ways that we could accomplish essentially what I would describe 

as twin goals: The goals of securing our country in a way that does 

not shut down the flow of legitimate trade and damage our economy. And those twin goals, and I have described them many times, 

are part and parcel of CBP’s strategy of a smart border and an extended border strategy, one that pushes our zone of security out beyond our borders so that we know what is headed our way before 

it arrives here at our ports and so that our borders are our last line 

of defense, not our first line of defense. And when I say our borders 

here, I mean all of our ports, official ports of entry into the United 

States, all the official crossing points. 

Our strategy, by the way, that we put together and we have implemented is essentially based upon four interrelated and interlocking initiatives. It is no one initiative. This is a layered approach that we have taken to increase significantly the security of 

maritime cargo and all cargo moving into the United States. 

But it is built upon four key initiatives, and the first is the 24-

hour and Trade Act rules, and these were rules and regulations we 

put into place requiring advance electronic information, initially on 

all ocean-going sea containers 24 hours before they were shipped 

to the United States, and now on all cargo shipped to the United 

States. 

The second initiative was building and developing the Automated 

Targeting System that is our risk targeting system at CBP’s National Targeting Center that uses targeting rules that are based 

upon strategic intelligence and anomaly analysis to assess for risk 

14

of terrorism every single cargo shipment that heads to the United 

States before it arrives. And in the case of sea cargo containers, before it even leaves foreign seaports to the United States. 

The third is the Container Security Initiative, and that, of 

course, is our partnership with governments, other governments of 

the world to screen high-risk containers before they are loaded on 

board vessels for the United States. To implement CSI, we have entered into CSI agreements with over 23 countries and we have implemented, that is made operational CSI at 36 of the largest foreign seaports of the world, seaports that include everything from 

Rotterdam to Singapore to, recently, Shanghai. 

Now, these didn’t all start at once. They started with one port. 

You have to start someplace. That was the Port of Rotterdam, by 

the way, as a result of an agreement with the Dutch, with the 

Netherlands, and the most recent port being Shanghai, China, one 

of the largest seaports in Asia. 

The fourth initiative was the Customs-Trade Partnership Against 

Terrorism, or C–TPAT, and that is our partnership with the private sector, with the major U.S. importers, with ocean-going carriers and others that own, operate, or are key participants in the 

supply chain from overseas to the United States. Today, C–TPAT 

has more than 5,000 certified C–TPAT companies who have, I submit, increased the security of the supply chain, literally from the 

foreign loading docks of their foreign suppliers to U.S. ports of arrival, and they have done it, in part, in exchange for benefits from 

Customs and Border Protection in the form of faster processing of 

their goods on arrival. 

Let me say just right out of the box here, none of those initiatives existed on September 11. All of them have been put in place 

since September 11, and taken together, these initiatives are part 

of our layered strategy and they do provide greater protection to 

our country against terrorist attacks, and importantly, they provide 

greater protection for the primary system of international trade. 

These initiatives help protect the trading system itself against potential terrorist exploitation. 

I might add, by the way, while I didn’t list it as an initiative, of 

course, part of our strategy, too, has been adding significant additional detection technology at our own borders, at our own ports of 

entry, both seaports and land ports, to better detect against potential terrorist weapons. 

But CSI and C–TPAT, they are revolutionary initiatives, but 

they were initiatives that, in my judgment, in our judgment, we 

needed to move forward with, and we needed to move forward with 

them quickly, indeed, as quickly as possible because for all practical purposes, there was no security of the supply chain to protect 

essentially the movement of goods to the United States before September 11, or very little. 

But these initiatives are and they were always intended to be—

let me make this point very clear—dynamic and evolving initiatives 

that have improved and need to continue to improve. These initiatives work in concert with each other and with the National Targeting Center and with advance information and risk management. 

As a result of one of the recommendations of the GAO, we have 

decided to, for example, reduce the credits for being a certified 

15

1See Exhibit No. 4 which appears in the Appendix on page 111. 

C–TPAT partner. We didn’t eliminate them, but we have reduced 

them and we have gone to a tiered system. 

Let me also say that, with respect to these initiatives, I think it 

is important to understand that essentially as we proposed and 

launched them, that many people actually said that it couldn’t be 

done. Many people said it would take years to get them done, that 

there were sovereignty concerns and all of that. 

And I can tell you that customs agencies in other countries 

around the world, they use their inspectional capabilities for inbound containers. It was a revolutionary idea to say, based upon 

the United States making a request that we deem this container 

high-risk and after analysis something that should be inspected 

outbound, that we want foreign countries to inspect containers 

going outbound rather than inbound into their respective countries. 

And there may be some disagreement on the percentage here, 

but based upon the number of containers that we have requested 

be inspected by our host nation colleagues in these 36 foreign seaports, those requests have been honored about 90 percent of the 

time. There have been occasions where we have gotten additional 

information from the host nation where we could actually assess 

the risk as not being sufficient to require an outbound inspection, 

and there have been—I think the point is, you have to be there, 

you have to work with these countries in order to make sure that 

we have as many of the highest-risk containers that are searched 

outbound before they come to the United States. 

If they are not searched there, though, this is a layered defense 

strategy and we have mandated that every container that we deem 

to be high-risk for purposes of inbound, and that is every container 

that scores above 190 pursuant to our Automated Targeting System, it must be inspected upon arrival into the United States if it 

has not been inspected in an outbound CSI port. 

Mr. Chairman, I see my time is up. I just want to conclude by 

saying that I believe that these initiatives are working. I am convinced that America is safer today because of them. I look forward 

to working with this Subcommittee, with the full Committee, with 

the Congress, with GAO to further improve, because there are 

some further improvements we want to make to make these initiatives even more effective. Thank you, Mr. Chairman. 

Senator COLEMAN. Thank you very much, Commissioner. 

I want to first talk about C–TPAT and the concern that we have. 

Can we have Exhibit 41 displayed? Let us first talk about the process by which someone becomes a member. 

The concern is if there is a recognition—can we turn that sideways? Thank you. 

By virtue of membership, the benefit is a diminished likelihood 

of inspection. Is that the purpose? 

Mr. BONNER. That is the essential bargain that incentivizes the 

investment by private sector companies to improve their supply 

chain security. 

Senator COLEMAN. The concern is that to receive benefits, a company provides Customs and Border Protection with their supply 

chain security profile. The supply chain specialist looks at the writVerDate 0ct 09 2002 11:43 Dec 05, 2005 Jkt 021825 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\21825.TXT SAFFAIRS PsN: PAT
16

1See Exhibit No. 3 which appears in the Appendix on page 110. 

ten information, checks various databases, and upon successful 

completion of this paper review, a member receives seven times as 

few inspections. Is that a fair summary of the process today? 

Mr. BONNER. Well, before we have modified this, and we did it 

recently, I thought it was about six times less likely that you would 

receive a security inspection if you had committed to meet the security standards and criteria of C–TPAT. 

Senator COLEMAN. One can talk about the number of times, but 

in effect, are you virtually ensuring that shipments will not be 

searched? 

Mr. BONNER. No, by no means. But it does recognize that if you 

have committed—and by the way, in many instances, we are talking about major U.S. importers that we have dealt with, that U.S. 

Customs has dealt with for many years who are signing on the line 

that they are committing to meet the security criteria of C–TPAT, 

and that means that they are making a commitment to use their 

leverage against their foreign suppliers and vendors to meet the security criteria of C–TPAT. 

We are actually reaching into a part of the supply chain that is 

beyond the regulatory reach of the United States. I want this Subcommittee to understand that. In other words, we could not even 

regulate what a foreign supplier does in terms of supply chain security, but large U.S. importers which are C–TPAT members have 

the leverage to require those security criteria to be met under their 

purchase contracts and purchase orders, and that is what C–TPAT 

companies are doing. They have committed to do that. If they are 

not, by the way, they are subject potentially to criminal prosecution, penalties, and the like. 

So there is some measure of assurance that they have actually 

done what they have said they are going to do because we have 

dealt with them over the years. We know that they can be trusted. 

Now, we haven’t ended it there, as you know, Mr. Chairman. We 

have said, trust but verify, and I have heard the recommendations 

of the GAO and I believe that we need to—and we are ramping up 

the verifications of C–TPAT members. Right now we have about 12 

percent of the U.S. importers that are certified C–TPAT members 

that are validated. That is to say, we have verified that they are 

meeting their commitments with respect to their foreign supply 

chain. We have another 40 percent that are in progress. 

So over half of the current C–TPAT partners, we have either 

validated or we are in the process of validating their supply chain, 

and we are hiring up and ramping up the number of supply chain 

security specialists at Customs and Border Protection in order to 

be able to do this more rapidly and to make sure that the C–TPAT 

members out there know that we are going to validate, and frankly, if they aren’t living up to their commitments, and most of them 

are, virtually all of them are, but the ones that aren’t are going to 

be suspended and decertified and thrown out of the program. 

Senator COLEMAN. We have a discussion about numbers here. At 

least as I understand it—I think Exhibit 31 demonstrates—that we 

currently have 9,011 applicants to the program——

Mr. BONNER. That is about right. 

17

Senator COLEMAN. I have applicants, of which 4,857 have been 

certified by staff members and now receive the benefits. But in 

terms of validation, only 546 of those certified have had their security programs verified or validated. Is that accurate? 

Mr. BONNER. I think that is about right. Ten to 12 percent have 

had the validations completed and there are another, roughly, of 

the importers, another about 40 percent or so that are in progress. 

Senator COLEMAN. But all those that are certified receive the 

benefit of participating in the program. 

Mr. BONNER. That is right. We have reduced that benefit now recently based upon some of this recommendation. 

Senator COLEMAN. Now you have a tiered benefit. As a result of 

the investigations——

Mr. BONNER. You are absolutely right. There are benefits in 

terms of some degree of reduced inspections because you have committed and represented to U.S. Customs and Border Protection 

that you have and are meeting the minimal supply chain security 

criteria for your supply chain back to your foreign vendor. So that 

is true. 

Senator COLEMAN. I believe that in the two instances that the 

Chairman spoke of, where Chinese nationals were smuggled into 

this country, involved C–TPAT members. Is that correct? 

Mr. BONNER. It was a C–TPAT ocean-going carrier. The importer 

wasn’t C–TPAT nor was—but the one link that was C–TPAT there 

was the ocean-going carrier, in other words, the company that was 

actually carrying the container from—and that was from, in both 

cases, from the port of Shekou, which is in Shenzhen, China, to the 

Port of Los Angeles-Long Beach. 

Senator COLEMAN. Let me go back on the validation process. Can 

you briefly describe that? 

Mr. BONNER. Well, yes. The validation process, we try to avoid 

the word ‘‘audit’’ because it has historic repercussions for the trade, 

Customs audits, and this is pre-September 11, before I became 

Commissioner, but it usually meant months that people would be 

in your company poring over all of your papers for compliance purposes. 

But it is a verification. The validation is a verification that you 

have, in fact, implemented the commitments that you have made 

and that you have said you are carrying out to improve the security 

of your supply chain, for example, that you actually do have in 

your purchase order contractual requirements of your foreign suppliers that it meet the security criteria that the C–TPAT importer 

has told it must do in order to be a certified C–TPAT importer, and 

that they do periodically monitor to see that their contract, that the 

contractual obligation is carried out. 

Now, we are verifying that—that is an essential part of the supply chain—as part of our validation process, Mr. Chairman. 

Senator COLEMAN. The GAO report has raised concerns that the 

validation process does not have any standard operating procedure. 

There is not a uniform system of validation. Is that a fair criticism? 

Mr. BONNER. I know that there was a criticism in the GAO report, and as a result of the criticism, we have put together a validation plan and I believe it sets forth our strategy for validations, 

18

how we prioritize validations, what we want our validators to look 

for. 

By the way, I will agree, at the very beginning of this process 

that we were—how do we know what the best practices were for 

the supply chain security? We went to major companies and we 

found out what it was. We had to develop expertise in this area. 

I think we have a lot now. 

But I believe we have met the concern of—a number of concerns 

that GAO raised, one of which was that we needed to have a validation plan, how we were going to go about it, what the rules of 

the games are. I am not saying, by the way, there can’t be improvements here. Mr. Stana may well suggest some and we are interested in continually improving how we validate, and the fact that 

we want to validate the C–TPAT members and we have a regime 

now and a staffing level that is going to help us do that far more 

rapidly than we were able to do when we launched this program, 

starting with seven private sector companies that partnered with 

us back in December 2001. 

Senator COLEMAN. Commissioner, I will sum it up this way. I understand the vision of C–TPAT is to identify best practices and 

then use those. The concern, however, is that you have a substantial number of operations—and they are not all Wal-Mart and they 

are not all internationally known operations—that receive substantial benefits prior to certification, prior to validation, and the program is expanding. 

I think that is the concern in this here report, and I appreciate 

the fact that you are continuing to look at this, to develop a tiered 

system, to improve the validation process, but I think those concerned, based on the risk if we fail, and you are in a business 

where failure, you can’t allow it. If we fail, folks are going to come 

back and say, how did you let this operation get through? They 

simply applied. It was done on paper. You never looked at their operation, never did any physical review, never did any audit, never 

did any validation, and they are going to be pointing right at you 

and I think it is going to be tough to respond if, God forbid, the 

unthinkable happens. 

Mr. BONNER. Well, nobody gets benefits unless they have been 

certified, and as you know, Mr. Chairman, of the security plans 

that have been put forward to us, we rejected one out of five. About 

1,000, we have said, no, this doesn’t cut it. This is not meeting the 

security criteria that is required for C–TPAT. 

But I understand what you are saying and we agree, I think, 

that we need to—actually, as a result of things that the Subcommittee and the staff has done here, I have taken a look with 

my staff and we have not eliminated, we have reduced the level of 

benefits for just being certified and moved to a tiered system so 

that you do get more increased benefits after we have actually validated or verified that you have met your commitments. 

Senator COLEMAN. That is appreciated, Commissioner. Senator 

Levin. 

Senator LEVIN. If you are certified but not validated, you get less 

benefits? 

Mr. BONNER. That is right. 

19

Senator LEVIN. You said before the changes, there was six times 

less likelihood of what? 

Mr. BONNER. Well, if you——

Senator LEVIN. Less likelihood of——

Mr. BONNER [continuing]. Were certified, just on average—this is 

just taking a statistical analysis—if you were a certified C–TPAT 

member, you had made the commitments, said you were doing 

them, and so forth, it was less likely that you would get inspected. 

The reason is——

Senator LEVIN. Six times——

Mr. BONNER [continuing]. You got a credit. You literally got a 

credit against the Risk Targeting Scoring System for being a certified C–TPAT partner——

Senator LEVIN. You were six times——

Mr. BONNER [continuing]. The effect of which——

Senator LEVIN. Got you. You were six times less likely. 

Mr. BONNER. Yes. 

Senator LEVIN. After the changes, where you now tier the benefit, depending on whether it has been validated, if you are not 

validated, what is the multiplier? Are you four times less likely? 

Mr. BONNER. Let me tell you what it means in terms of the scoring credit. We reduced the scoring credit from about 125 for being 

certified, plus you could also get a potential of even more than that 

just for being certified, we have reduced that down to 75. And we 

have done an evaluation, Senator, we have done an evaluation at 

Customs and Border Protection and this is our National Targeting 

Center, it is our Office of Intelligence, and so forth, an evaluation 

of looking at the various risk factors that are in our targeting rules, 

and there are 300 targeting rules that can fire with respect to any 

particular container and there is a certain level of points, if you 

will, that are assigned if a container—and they go from—I don’t 

want to go into great detail here——

Senator LEVIN. Yes, I wish you wouldn’t. 

Mr. BONNER [continuing]. By country of origin and so forth. 

Senator LEVIN. I wish you would just try to give me the bottom 

line. You were six times less likely to be inspected after you are 

validated. Before you are validated but after you are certified, is 

that about three times less likely, would you say? 

Mr. BONNER. I can’t really give you an answer. We just implemented this in the end of April and we are going to need to see 

how it works out. I believe it will be that there will be some degree 

of increased inspections over what it had been before for just being 

certified, and it may well be that there is some degree of increased 

benefits if we have actually validated the C–TPAT member. 

Senator LEVIN. In terms of the number of containers coming into 

the country, as I understand the figures, roughly 9 million come by 

sea, 8 million by truck, and 6 million by rail. Does that sound 

about right? 

Mr. BONNER. Well, it is 11 million by truck. Seven million come 

across the Canadian border. It is between 9 and 10 million, last 

year, sea containers. 

Senator LEVIN. OK. 

Mr. BONNER. That has actually gone up about—almost 50 percent since 2001——

20

Senator LAUTENBERG. That is across the entire country? 

Mr. BONNER. Across the entire country. 

Senator LEVIN. So we have more coming in by truck than we do 

by sea? 

Mr. BONNER. That is correct. 

Senator LEVIN. And we have about 6 million by rail, is that 

about right? 

Mr. BONNER. That is about right. I don’t have that figure before 

me, but there are—we do get rail cars from both Mexico and Canada, as you know, Senator. 

Senator LEVIN. The program applies to all these containers? 

Mr. BONNER. The C–TPAT program, yes, it does. 

Senator LEVIN. Now, in terms of the—you said you can’t—you do 

the C–TPAT by agreement with the importers, basically, and that 

we are able to reach back into the supply chain in ways you could 

not do but for that voluntary agreement with the importers, is that 

basically what you said? 

Mr. BONNER. In essence, that is right. 

Senator LEVIN. I am not suggesting we change our approach, but 

isn’t it true that we could simply say, unless you can certify to us 

that you have reached back, you cannot import? Why do you just 

assume that we cannot enforce our rules without an agreement on 

the part of importers? That is a lot better way to do it, I am not 

arguing with that. But I am just saying the premise that you establish here, it seems to me is one I want to challenge. 

Mr. BONNER. Here is the problem. Ultimately, it is—you are 

building in the critical foreign security—security is actually at the 

foreign supplier where the container is actually being loaded or 

stuffed. That foreign supplier, we don’t have any regulatory power 

over that foreign supplier. 

Senator LEVIN. Correct. 

Mr. BONNER. As I was discussing this, and this goes back literally to October or November 2001, what do we do under this circumstance? I mean, we are going to increase security in terms of 

things moving through our ports, but is there a way to extend the 

border out and could we do this in partnership? 

I will say this. It is very difficult to think of a regulatory regime 

that is enforceable against the foreign supplier. So you have to literally go through the U.S. importer——

Senator LEVIN. That is not my question. My question is, you 

could require a certification of the importer that certain protective 

actions have been taken by that importer, couldn’t you? 

Mr. BONNER. Well, yes, you could, I think, but some importers 

would say—if you are trying to do this by regulation, some importers will say, well, look, we can’t do that. We don’t have leverage 

over our foreign suppliers. Our foreign supplier is a big distributor 

in China or Malaysia and we don’t have that leverage. 

Senator LEVIN. You have huge leverage over them. Unless we 

can certify to the U.S. Customs, we ain’t buying your stuff. That 

is huge leverage. 

I just want to challenge your statement, because it seems to me 

it could lead to some actions or inactions on our part which I won’t 

accept. Now, I want to do it by partnership. I would rather do it 

your way. But I don’t want to accept the premise that you could 

21

not require an importer to certify that he has actually achieved 

that same level of protection through agreement with whoever his 

supplier is that you can do in a voluntary way. I will leave it at 

that. I just want to tell you I challenge your premise. 

Mr. BONNER. If you just, though, if you think about it, if you are 

trying to regulate, you are telling every U.S. importer, you must do 

this and you must establish this level of supply chain security, and 

there are companies, small companies——

Senator LEVIN. No, we are not saying you must——

Mr. BONNER [continuing]. Small importers that can’t do that, 

and, therefore, can’t participate in C–TPAT, either, because they 

are not able to do the security of the supply chain that is necessary. 

Senator LEVIN. So it is a practical way to do it. It is the better 

way to do it. I am just saying you are not limited to do that, and 

to suggest that our government is limited in that way, it seems to 

me, is giving away much too much. We someday may have to require certification of certain things to protect our borders which 

does not depend upon a voluntary agreement but says, unless you 

certify that, you cannot bring in materials. Let me leave it at 

that——

Mr. BONNER. I take your point. I still think, overall, a voluntary 

partnership approach made a lot of sense at the time——

Senator LEVIN. I agree with that. 

Mr. BONNER [continuing]. This is November 2001. I still think it 

makes a lot of sense. 

Senator LEVIN. I do, too. I am not challenging your effort. I think 

it is the right way to go. 

You have indicated that all of the high-risk cargoes are inspected 

either overseas or here, that is mandatory, is that correct? 

Mr. BONNER. Yes. I probably should define high-risk, but yes. 

Senator LEVIN. Yes, but, as you define it, because there was an 

article in the paper that suggested that you are not quite that confident that those inspections take place at one point or another. It 

was a New York Times article, I believe, that was either today or 

yesterday which said that Customs officials would not provide documentation to show that all the high-risk containers not inspected 

in foreign ports were checked once they arrived in the United 

States, but they said they were reasonably confident the checks 

had been made. Is that a more accurate way to state it, or are you 

more confident than reasonably confident? 

Mr. BONNER. Let me tell you my view on it, the reason I do have 

some confidence that the high-risk containers do get a security inspection, and that is that I am going to define high-risk container—

there are different ways of defining it——

Senator LEVIN. I understand. 

Mr. BONNER [continuing]. But I am just going to define it right 

now as this is the rough cut through our Automated Targeting System at the National Targeting Center that says this container has 

a threshold scoring of 190 or above. 

Now, by the way, you can do further analysis as to whether that 

is high-risk or not, but we have essentially said and implemented, 

and this goes back to the summer of 2002, we basically said to our 

ports of arrival, and that is the Port of Newark and that is the Port 

22

of Los Angeles, that every container that scores over 190 will be 

inspected at the port of arrival in the United States unless it has, 

in fact, had a security inspection at a CSI port overseas. In other 

words, we are not requiring it be done twice if, in fact, that CSI 

inspection has taken place. 

But that is why I can say with a fair degree of confidence that 

every container that scores above 190 and is defined as high-risk 

for the terrorist threat in that way is going to be screened, if not 

at CSI ports, and we are still trying to push that number up, but 

is going to get an inspection on arrival, and that is a defense in 

depth. We have extended our border out and we are trying to get 

the extended border closer to what we do on arrival. But that is 

why I think I can say with some confidence that every high-risk 

container defined that way does get an inspection, either at CSI 

ports outbound or on arrival in the United States. 

Senator LEVIN. That is a little more assuring than reasonably 

confident, as reported in yesterday’s New York Times. That is all 

I am saying. I am glad to hear it. You are more confident than reasonably confident. I am glad you are. I hope you are right. 

I will just wind up by saying I am out of time, so we can’t get 

into this trash issue, but I have looked at those X-rays. 

Mr. BONNER. We have talked about that before and——

Senator LEVIN. We are going to have to find a way, one way or 

another, because it is unacceptable to have thousands of these 

trucks coming in. It is all anomalous cargo. You can’t see it on an 

X-ray. One way or another, we are going to protect—we have to 

find a way to protect our people. 

Mr. BONNER. As you know from our conversations, I don’t think 

we should be—we shouldn’t have trash coming in from Canada into 

the United States, but I cannot——

Senator LEVIN. Amen. 

Mr. BONNER [continuing]. I cannot prohibit it. I am going to need 

some statutory authority to say that is prohibited material. 

Senator LEVIN. If you can’t reasonably assure us the way you 

just did on this other cargo, if you can’t reasonably assure us 

through an X-ray, and you sure can’t because it is all anomalous, 

then you have to tell them, hey, after this point, no more trash. 

Mr. BONNER. We are running it all through radiation detection, 

too, to let you know, but——

Senator LEVIN. I am not talking radiation. 

Mr. BONNER. I know. We will talk about that some more. 

Senator LEVIN. We need your help on that. 

Senator COLEMAN. Thank you, Senator Levin. Senator Collins. 

Chairman COLLINS. Thank you, Mr. Chairman. 

Commissioner, I want to follow up on the issue that Senator 

Levin just raised about containers that appear to be high-risk and 

have been referred to host government officials for inspection. In 

its report, GAO found that since the CSI program started, 28 percent of the suspect containers referred to host government officials 

for inspection were not, in fact, inspected for a variety of reasons. 

But more recently, GAO notes that the percentage of inspections 

has gone up to 93 percent, so we clearly are getting more cooperation from the host governments which is very important. 

23

One of the reasons that containers might not be inspected cited 

by the GAO and noted in the New York Times story yesterday, is 

they have already been loaded and are on their way to our shores. 

That creates the worst-case scenario. So I want to follow up on 

your exchange with Senator Levin. 

Are you saying that when you have a high-risk container that 

has been targeted for inspection but was not inspected by the host 

government, it is now inspected upon arrival? 

Mr. BONNER. Yes, I am saying that. I am making an assumption 

that it was targeted because it had a risk targeting score for the 

terrorism threat of 190 or above, and I will say in each and every 

case—now, I mean, I can’t sit here and say that somebody didn’t 

fail in their job in some way. 

But if you looked at, for example, just taking last month, April, 

there were—the total number of containers that scored over 190 

was about 32,000, and 99.9 percent of those containers were inspected on arrival. So I do have a pretty high degree of confidence 

that if has been loaded and we deemed it as a high-risk, that we 

would get it on arrival. 

Now, we are getting better, too, with the host nation in terms of 

getting information quicker so that we are reducing even that 

small percentage, which I think was not great, but that small percentage of containers that had been loaded. 

And I want to point out one other thing that is important, I 

think, in just thinking about this issue, and that is if we have specific intelligence about a container or there is just enough risk factors that we deem it to be totally high-risk, I have no-load authority, and we have used that sparingly, but that is the authority to 

tell the carrier, don’t load that container or unload it at that seaport. Now, we use that very sparingly because we don’t want to, 

frankly, sour the relationship with the host nations which are cooperating with us in the Container Security Initiative unless we 

really have to. 

Chairman COLLINS. It does look like there has been considerable 

progress in that area. 

Is it feasible to inspect en route, to have the Coast Guard or Customs officials go out? The reason that I ask is, obviously, having 

the inspection occur in the host country is the best solution. Having 

it occur once it gets to our shores could in some cases be too late. 

The whole idea is to keep the danger away from our shores. Is it 

feasible to do an inspection en route? 

Mr. BONNER. It is difficult, but we have done it with the U.S. 

Coast Guard. The Coast Guard boards. It has taken Customs and 

Border Protection inspectors on board with it because we are concerned about a particular container before it actually is allowed to 

come into port. Now, again, that has been relatively rare we have 

done that, but we have done it when there was tactical intelligence 

that indicated that there might be a terrorist threat with respect 

to containers on board a vessel that make those—not just above 

190 here, but those that we are really concerned about. 

So it is possible to do it. It is difficult, though, because if you 

have a container ship with 3,000 containers stacked on top of each 

other, it is very difficult to get access, to be able to open it. We 

24

can’t run it through X-ray scanning machines and so forth. So it 

is difficult. 

We have done it. To me, that would not be the preferred solution. 

You are right. It is better to identify this container and have that 

security inspection done before it leaves the foreign port, before it 

goes on board that vessel. But we can do it. We have done it on 

a relatively few occasions. 

Chairman COLLINS. Of course, our greatest fear is that a cargo 

container would be used to smuggle weapons of mass destruction 

into the United States, and some experts have predicted an attempted terrorist nuclear strike within the next decade. That is obviously a horrible scenario, but one that we need to try to defend 

against. 

For that reason, CBP has been deploying, I understand, radiation 

portal monitors at U.S. seaports. I understand, however, that these 

portals are deployed at the exit gates of our seaports, yet containers may sit at a port for as long as 5 to 7 days before they are 

screened for radiation. 

We know that many of our major seaports are located in heavily 

populated areas—New York, Los Angeles—that clearly could be 

targets. I am concerned that we don’t do the screening immediately 

upon arrival as opposed to at the exit gates. Is this an issue you 

have looked at? 

Mr. BONNER. We have looked at it. I couldn’t agree with you 

more. There are some difficulties in how do you do this. 

First of all, the thing I would like to do, and we are joining very 

closely now with the Department of Energy and have over the past 

year or so, is to make sure that their megaports program, where 

they have radiation portal monitors and funding to put these in 

foreign seaports, is conjoined with our CSI ports. And as we expand 

CSI ports, we not only have the large-scale X-ray machines, which, 

by the way, countries that want to be in CSI, they either use their 

own equipment—they already had it or they have purchased it. We 

do not purchase it for them. 

But we would like to also get the radiation portal monitors overseas, at least every container that we deem to be high-risk after 

analysis by our CSI team goes through not just large-scale X-ray 

imaging, but a radiation portal monitor. Right now, it goes through 

some X-ray screening, but it is not as good as a portal monitor. 

Now, we have also looked at this issue of how do you do this as 

containers are being offloaded, and we have been looking at—unsuccessfully, I will tell you, so far—attempting to get some radiation detection on the crane, literally, the gantry that loads and 

unloads containers, so that as you are unloading the container, you 

would get a determination whether it is reading radiation. As you 

know, most of these radiation reads, we know from our portal monitors that we have in place, are innocuous material, but you compare it with the manifest and so on. 

So far, that hasn’t worked out so well, and we think that, nonetheless, we have to do the best we can here in terms of being able 

to screen cargo containers for radiation emissions and then resolving whether that is something of concern or, as it usually turns out 

to be the case, not of concern. 

25

So far, the best positioning we have for ports of arrival is as 

those containers are being essentially put on board trucks and 

moving out of the seaport. I wish there was a better solution. We 

sure as heck have looked at this. And I invite anybody here who 

has a better answer, tell us, because we are right in the process 

right now of rolling out the radiation portal monitors to our seaports around the country, we have many of the major terminals of 

the Port of New York, which is mainly in New Jersey, as well as 

the Port of Oakland and several other ports. So if there is a better 

solution, we are looking hard at it, but that is the best one we have 

right now. 

Chairman COLLINS. That is a challenge. I am very intrigued by 

the idea of having the monitor built into the crane somehow. That 

really sounds very interesting. 

As I understand it, the Department of Energy has deployed portals in only two foreign seaports at this point, is that correct? 

Mr. BONNER. That is my understanding, Port Piraeus—we have 

CSI in Piraeus, as well—and Port of Rotterdam. We are also on 

CSI there. But we are working with them so they will work with 

us in concert here, and they are committed to doing this at the Department of Energy so that we expand the radiation portal to the 

other 34 CSI ports as well as the new CSI ports that we will be 

expanding to. 

Chairman COLLINS. Is this a matter of insufficient resources to 

pay for these monitors to be deployed, or is it a lack of cooperation 

from the host countries, or is there some other reason? Two is not 

very many. 

Mr. BONNER. No. You are going to have to ask the people at 

the—this is the second line of defense—mega ports initiative at the 

Department of Energy. I don’t feel comfortable telling you. But we 

have offered and they have accepted that every CSI port we go to 

to implement CSI, that they will essentially be joined at the hip 

with us moving forward now, and that is very important. 

And they do have funding. Ironically, I suppose, in some ways, 

they have funding to put radiation portal monitors at overseas 

ports. We don’t have that funding. We don’t have enough funding 

to totally complete our implementation plan for radiation portal 

monitors at our own seaports and land border crossings and the 

like. But we are making good progress with the funding that we 

have. 

Chairman COLLINS. Thank you for that information and thank 

you for your good work. 

Mr. BONNER. Thank you. 

Senator COLEMAN. Thank you, Senator Collins. Senator Lautenberg. 

Senator LAUTENBERG. Thanks, Mr. Chairman. 

Mr. Bonner, you agreed to the fact that there were some 9 million-plus containers that come here each year. I don’t know whether you are aware of it, but the New Jersey-New York port takes 

almost 30 percent of those containers each year. Two-point-six million out of 9 million is almost 30 percent, right? And so it is a very 

high volume that reaches our shore, and it has been noted by several of the other Senators that these ports are located typically in 

26

1See Exhibit No. 1 which appears in the Appendix on page 108. 

very highly populated, densely populated places. Am I correct with 

my arithmetic? 

Mr. BONNER. I know that the Port of New York-New Jersey is 

the second largest in terms of the movement of cargo containers 

after the port of L.A.-Long Beach. I would say that is in the ballpark. 

Senator LAUTENBERG. OK. 

Mr. BONNER. It is 2 or 3 million containers a year that come into 

the Port of New York. 

Senator LAUTENBERG. I don’t want a long discussion about arithmetic. It is or it is not. 

Mr. BONNER. I don’t have the exact number, but that is about 

right. 

Senator LAUTENBERG. Thank you. But the volume is what I think 

deserves some attention in terms of grants that are given for port 

security. Mr. Chairman, we have 30 percent of the containers coming into a very highly, densely populated area. It is said that the 

distance between Newark Liberty Airport and the Port of New 

York-New Jersey is the most dangerous two miles for terrorist targeting in the country and there is something there that we really 

have to work on. 

Now, what I don’t understand, could you explain just this one 

chart that I looked at, CSI ports, it is headed, Hong Kong, Yokohama, and Le Havre. It says, percentage of exams requested that 

were actually conducted——

Senator COLEMAN. I think it is Exhibit 1.1 We have it set up, 

Senator Lautenberg. 

Senator LAUTENBERG. Thanks. So the requests are made by us, 

I assume, Mr. Bonner, and it says Le Havre, and I picked on Le 

Havre particularly because it was a place I landed during World 

War II and know that it was a very active harbor. But I also know 

that Le Havre and France have had serious problems with immigration, both legal and illegal, from North Africa, where there are 

lots of people who are not so friendly to us. So is the 29.61 percent 

the number of times that we said, we want to inspect these cargoes, and was it denied, or that they were actually conducted from 

the total volume of cargo that was leaving there? Is that what that 

is? 

Mr. BONNER. Well, it could be a number of reasons for it, but I 

am troubled by that, the fact that usually most of these CSI ports, 

our requests are honored 90 percent or more of the time, and at 

Le Havre, that is troubling that it is so low. 

Senator LAUTENBERG. I agree. 

Mr. BONNER. And it is one of the most—it does stand out. It is 

something, by the way, we are continuously evaluating and working with the French customs authorities, and all other CSI ports, 

for that matter, to increase the percentage of requests that are 

honored, because that is the whole point of CSI. If they are not——

Senator LAUTENBERG. And it ranks comparative to Hong Kong 

and Yokohama—these are both very active ports—Le Havre has 

substantially more cargo than Yokohama and yet the inspections 

27

are a very low percentage of the high-risk suspected cargo. So it 

is a matter of concern. 

One of the things that also stands high in my mind, and that is 

when we look at countries like Afghanistan, Egypt, Libya, Jordan, 

Saudi Arabia, why aren’t we focusing our efforts on cargo originating in countries that pose some real threat? And again, we 

would have to expand our CSI initiative. 

Mr. BONNER. Maybe I could put my map board on here, but that 

is a good question and let me just say the reason that we put CSI—

there are a number of reasons, but CSI is at ports, seaports 

through which most of, let us say, the cargo shipments from Port 

Saiid, Egypt, move through, are offloaded by feeder ships onto 

ports in Italy, for example, where we do have CSI. Most of the—

not 100 percent, but most of the shipments, let us say, out of Pakistan move through by feeder ship to Singapore, are offloaded—or 

other ports in Asia—are offloaded, so we are able to inspect a lot 

of the cargo containers that are coming from what I would call the 

most high-risk areas in terms of presence of potential terrorists. 

Senator LAUTENBERG. And it would be unreasonable, wouldn’t it, 

to say that every piece of cargo that leaves there has to go through 

some other port. That would be an awful lot of trouble in terms of 

cargo delay and sending economic opportunity to other ports. 

But the question was asked by Senator Collins about the inspections by Coast Guard. We have a lot of lightering of cargo in, let 

us say, the Port of New York-New Jersey. At that point in time, 

would it be possible for either Customs or Coast Guard to get to 

those places, especially if those ships come from some of these 

ports, and take a look around? There is equipment that is fairly 

mobile that would give you some indication of what might be a 

threat in one of those containers. 

Mr. BONNER. We would do it, if there were specific intelligence 

or just the risk factors were sufficient. We would figure out a way 

to do it. It is hard to do even on a lighter, by the way, because you 

want to run it through large-scale X-ray scanning machines. You 

can run it through radiation detection, to some extent, not the 

monitors, but you can have radiation detection devices. 

But if I could go back, you made an interesting point. The part 

of CSI, thinking about what it has done, it is not just all about how 

many containers get inspected. We actually have the capability 

right now because we have built out the Container Security Initiative that if there were time of stress where we elevated the threat 

level, we have the possibility right now with relatively minimal disruption to require every container coming from high-risk areas to 

come through, to be offloaded at a CSI port before it comes to the 

United States. Most of them do already, but we have that ability. 

And think of CSI that way, because it is designed to be essentially the insurance policy to keep the flow of trade moving, particularly if there is a terrorist attack or we move to, based upon 

intelligence, to a much higher threat level than we are at today. 

So that is exactly it. Everything from, potentially from—and I 

won’t name the country here, but may have to go through one of 

these CSI ports if it is coming to the United States. 

Senator LAUTENBERG. Mr. Chairman, I think it would be of interest to get an update on this program to see whether, in fact, we 

28

have expanded the program and to say whether you are short of 

personnel. Do you have enough people to do all these jobs? 

Mr. BONNER. Well, I heard—I can’t remember, it might have 

been you, Senator Lautenberg, but maybe it was Mr. Akaka, but 

just the cost—I know the cost seems a lot to place people overseas, 

and it does cost more. The rule of thumb to me was two times as 

much, but I will have to look at those costs. 

But we only have about 200 people overseas for CSI, and those 

are our targeters and those are the people that are getting additional information and intelligence, in some cases, from our host 

nation counterparts, and those are people whose job is to also essentially jawbone our host nation to make sure that it is inspecting 

the containers that are high-risk unless we have been assured, 

based upon information that the host nation has been able to give 

to us. 

Senator LAUTENBERG. I don’t mean to cut you off, but time is 

running here and I don’t have much left. You provoked a question 

in my mind when you said something about the equipment in those 

countries that are doing the inspections and implied that you 

weren’t sure what kind of equipment it was. Do we have a standard that we send to these countries to say, listen, this is the least 

effective equipment that you can use that can get certification that 

we will pass? 

Mr. BONNER. I have seen in many cases the X-ray imaging equipment that these countries have, and I will tell you, with one exception, and I won’t name the country, but with one exception, the 

large-scale X-ray imaging equipment that the CSI countries are actually using for these outbound inspections equals or exceeds what 

we have and what we use in the United States. 

So I am not against, by the way, having a standard on this. I 

know that is a recommendation of the GAO. But it is not just about 

penetrating power. It is also about the mobility of the equipment 

and that sort of thing. It is a combination of factors. 

But I am just saying, I have looked at their machines that——

Senator LAUTENBERG. But I thought in your response to Senator 

Levin that there was a suggestion that we didn’t know in each case 

what kind of equipment or whether the equipment was sufficient 

to give us any security. 

Mr. BONNER. We know exactly what the equipment is. We have 

assessed——

Senator LAUTENBERG. Every country? 

Mr. BONNER. But we haven’t said that you have to meet these 

precise standards or specification. We know that in every country, 

it equals or exceeds what we have in terms of our own NII equipment——

Senator LAUTENBERG. So if ours is poor, theirs is poor? 

Mr. BONNER. Except for one, and we are working on that country. But they are paying for the equipment. We are not buying it 

for them. So there is a certain amount of chutzpah to say, you have 

to do X, Y, and Z, particularly if the equipment—and as I say, I 

personally examined—not that I am the expert here, but our teams 

that go over for CSI examine and make an assessment——

Senator LAUTENBERG. I wouldn’t think it was too nervy to say, 

what kind of stuff have you got? 

29

If you would, Mr. Chairman, the country unnamed in public 

here, if it could be named under an executive commitment from the 

Chairman, I would like to know which of the countries——

Mr. BONNER. I will——

Senator COLEMAN. I share that concern and we would like to get 

that information, Commissioner. 

Senator LAUTENBERG. Thanks very much. Thank you, Mr. 

Bonner. 

Senator COLEMAN. Just to follow up on Senator Lautenberg’s 

question about standardized equipment, I understand that there 

isn’t a standard, but your testimony is that with the exception of 

one country, the standards equal or exceed ours. 

First, my concern is that this program, CSI, is only in the end 

as good as its weakest link. If there is a weak link, we could pay 

a price for that. 

As I understand from reports that I have read, the equipment 

that may meet or exceed ours are the gamma imagers, but in terms 

of radiation portal monitors, are there any standards that you are 

aware of? 

Mr. BONNER. Well, on the radiation portal monitors, I addressed 

that. What we have done and what we need to do is to link the 

Department of Energy, their funding for radiation portal monitors 

overseas. This is their megaports initiative with CSI. We have met 

with the Department of Energy a number of times. They are committed to doing this and we are doing it. And so that would be the 

radiation portal monitors, then, as we join them into the array of 

detection technology for at CSI ports, particularly for potentially 

high-risk containers. 

Those portal monitors are essentially the type of radiation portal 

monitors that we are deploying. We have deployed almost 500 of 

them now to our land border ports of entry and we are making 

great progress with our seaports. That is the best available technology there is in terms of being highly sensitive to be able to detect against even potentially nuclear devices and/or materials that 

could be used to make nuclear devices. 

We are working, by the way, on some advanced technology which 

we hope to have within about a year or so. It is essentially highly 

sensitive radiation portal monitors that can detect even fairly low 

energy emissions of both gamma and neutrons. 

Senator COLEMAN. I understand that there are supposed to be 

minimum standards—supposed to be—and I think the information 

we got from the agency, that a number of items a prospective CSI 

port must commit to, ability of their customs to inspect cargo 

exiting or transiting their country, access to and use of the non-intrusive inspection equipment, willingness to share trade data and 

intelligence. 

I believe the GAO report, and I know that this Subcommittee’s 

investigation found several countries not complying with some of 

these minimal standards, instances where countries were unwilling 

or unable to share intelligence, did not have the non-intrusive 

equipment or were using substandard equipment, and some lacked 

the authority to search U.S.-bound cargo that was transiting their 

ports. Would you disagree with that assessment? 

30

Mr. BONNER. As broadly as you put it, there are issues that we 

are working with with various countries. Not all of them, some of 

them have been extremely responsive and receptive, but there are 

some situations where they have agreed to acquire NII equipment 

but they haven’t—we have seen the purchase order, their government is buying it, but they don’t have it there. But there is NII 

equipment. In some cases, we loan them NII equipment for some 

developing countries. 

So you can’t be in CSI. It is not operational unless you have the 

large-scale X-ray imaging equipment. So all of them have it. 

Now, I mentioned the one country that we are—their equipment 

that they had purchased isn’t where we want it to be and we are 

working with that country to upgrade its NII equipment. 

Senator COLEMAN. CBP enters into declarations of principle with 

the host country? Shouldn’t you incorporate minimal standards into 

these declaration of principles. And if they are not going to share 

or can’t share intelligence or they don’t have the equipment, simply 

say that they are not a CSI operation. Otherwise, how do we have 

any assurance that we are getting adequate inspections if you don’t 

have these kind of uniform standards that are critical? 

Mr. BONNER. We definitely need the uniform standards. I totally 

agree with that principle. But the way we do it, I believe, is we 

work with the host nation, but if we can’t resolve an issue, we 

withdraw CSI. And CSI is very important economically to the countries that have implemented CSI because they are protecting their 

trade lanes, literally, between their foreign seaports, whether that 

is Rotterdam or Singapore, and the United States, and they understand that. 

So I believe we can get—some of these CSI ports we just got online in the last 2 months, in Dubai and Shanghai. Some of them, 

we have had for a while. But we work very actively with the host 

nation, and ultimately, we may clear what it is that they need to 

do to be a CSI partner with us. And I believe we can get there. But 

again, it is a matter of dialogue. It is a matter of working with 

many different foreign governments and foreign customs administrations. 

So I believe we are making good progress here. We do regularly 

evaluate where we are with respect to each one of these CSI ports 

through our management team here at Customs and Border Protection headquarters. 

I am not disagreeing with some of the conclusions there. They 

are probably right. Some of them, we have been able to correct. 

Some of them, we are moving forward on. Some of them, as Senator Lautenberg pointed out with respect to Le Havre, even though 

France was the third country to sign a CSI agreement, a declaration of principles with us, some of them are not sufficiently honoring our request to inspect, do a security inspection of high-risk 

containers before they leave foreign seaports. We work that number up, but if it doesn’t ultimately get to where it needs to be, then, 

of course, they are not meeting the CSI commitment and we will 

have no choice but to—and we are reluctant to do this, but we will 

essentially withdraw and we will not have that port as a CSI port 

unless they are meeting their commitments. 

31

1See Exhibit No. 1 which appears in the Appendix on page 108. 

Senator COLEMAN. And you have made it clear in your testimony 

that there is a significant economic advantage for these countries 

to have a CSI port. I suggest, Commissioner, we can do better than 

making it clear. We can make it mandatory. We can say, this is 

what we are going to require, or you are not going to get the economic benefit. 

Mr. BONNER. Yes. We could go back on that. We wanted the declaration of principles to be the principles of CSI and not get into 

all of the specific details, let us say standards and that sort of 

thing. There was a reason for that. There were two reasons for it. 

One is Circular 175 authority, and that is once you say it is a formal agreement, we have to go through the State Department. 

It takes a lot longer to even get an agreement in place. Second, 

when you start negotiating all of the specific terms with countries—we tell them exactly what is expected, by the way. When you 

start negotiating it and trying to put that in a written, let us say, 

agreement, it takes—it would have taken a lot, lot longer. Now, it 

might well be that at this point, we can circle back and say we 

need to definitize those commitments better, whether that is 

through an agreement, whether that is through some side protocol 

for the declaration of principles. And it also has to be the same for 

every country that is participating in CSI. 

Senator COLEMAN. And the concern is if it isn’t the same, you are 

really getting varying degrees of reliability on these inspections. 

Mr. BONNER. Well, if you don’t have the right—let us say the one 

country which its equipment may not be all we would like it to be, 

if we are not satisfied with the X-ray scan or image of the container, and based upon all of our information we think it is a highrisk container, we are not able to rule it out, we will ask for physical inspection, and we do and we get physical inspections. 

So there is—again, that is more time consuming, more laborious, 

and the host nation is doing it. But we get physical inspections 

when there is an anomaly or when—which is in a relatively small 

percentage of the containers that are run through X-rays—or if you 

don’t have an adequate X-ray machine, then we—the recourse is to 

do an actual physical inspection to make sure that the container 

does not contain a terrorist weapon. 

Senator COLEMAN. If we could get Exhibit 1,1 the exhibit with 

Yokohama and Le Havre and the other ports. Just two questions 

regarding that. 

The green, the higher risk, the number for Hong Kong being 

15,000, a little over 15,000, Le Havre, 4,259. Is your testimony that 

those that are high-risk that every one of those 15,129 containers 

are checked in this country, if not inspected abroad. 

Mr. BONNER. At least on arrival, if they haven’t been security inspected at a CSI port. And, the high-risk, the thing about talking 

about CSI, we didn’t start off with CSI. We actually started off 

with saying, let us have an automated system that uses strategic 

intelligence for purposes of what containers we should inspect at 

our ports of entry, and let us do it on a national basis and let us 

just say that if something scores above a certain level, that is going 

to give us at least a broad enough concern that we want it inVerDate 0ct 09 2002 11:43 Dec 05, 2005 Jkt 021825 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\21825.TXT SAFFAIRS PsN: PAT
32

spected on arrival. That is what we did first. Then we expanded 

our border out with CSI. 

But, yes, that is a very high number because Hong Kong is a 

port, the largest port in the world. It is responsible for shipping 10 

percent of all of those 9 million containers to the United States 

come from or through the Port of Hong Kong. So it has a huge 

number of containers and it has a huge volume. 

The CSI team there made 1,086 requests of Hong Kong Customs 

and Excise that they do a security inspection. I am not totally 

happy with that number, but 832 times out of roughly a thousand, 

they did, so 80 percent. We would like to get that higher. Our CSI 

management team, some of whom are behind me right now, work 

to push that number up so that our request, when we say we are 

sufficiently concerned about this container that we want it inspected, is closer to 100 percent. I mean, that is what we are looking for. There will always be some reasons why we probably won’t 

reach 100 percent, but——

Senator COLEMAN. Let me ask another question about the highrisk containers that are supposed to be checked here. Our investigators looking into that, we were not able to either find a paper 

trail or anything to actually confirm that they were inspected here. 

And so I would ask if you would supply that to this Subcommittee. 

How are you sure that, in fact, those that are identified as highrisk are, in fact, inspected when they arrive here? 

Mr. BONNER. Well, I am assured because—as assured as one can 

be, as the Commissioner, because we have mandated that at our 

ports of arrival, that every container that scores above 190 will be 

inspected, and we started that essentially in about the summer of 

2002. So if we can’t get it over there—and this is before we had 

a single CSI port. The first CSI port came online in September 

2002, and that was Rotterdam. 

So we started that program, and we never said with CSI, look, 

we are using host nations’ equipment, we are using the host nations’ resources, we are kibitzing whether we think that their Xray scan shows an anomaly or not. We have never said that we are 

going to get total equilibrium. By the way, I would like to see that, 

where we are actually getting everything above 190 that would be 

given a security inspection overseas at a CSI port. 

But what we have said is after getting the 190, we have our 

targeters there. We do further analysis. We do get information, by 

the way, in many instances. I am not saying it is perfect in every 

country, but we do get information that provides us additional 

input as to whether a container is a potential risk or it is not a 

potential risk. Sometimes this is just the—it is the customs authority getting on the phone and saying, well, we have a freight forwarder here. Who is the real shipper? Who is the real party and 

interest, that sort of thing, just getting additional information to 

make a more—a better assessment of what is the highest risk, basically, and then making that request to the host nation that would 

do it. 

Now, if we need to at time of stress, this system is in place. It 

is not like we have to build it. We don’t have to build the cockpit 

doors here. These are the cockpit doors for maritime security. It is 

33

there. If we have a time of stress, we can increase the level of our 

request and require and demand, for the reasons you are saying. 

And what is our ultimate lever here? You don’t do it, the Commissioner is exercising no-load authority. It is telling the carrier 

they cannot put that container on board the vessel. 

So we have a way of ratcheting this up, particularly at a time 

of stress. So view it as a security system or a piece of an overall 

security system——

Senator COLEMAN. And time of stress, what do you mean by time 

of stress? 

Mr. BONNER. By time of stress, I mean there is a terrorist attack 

that might have been using the maritime cargo system in some 

way. There is significant intelligence that indicates that there is a 

significantly high risk of terrorist exploitation of a, let us say, the 

Trojan Horse, an oceangoing cargo container to carry a weapons of 

mass destruction. That is a time of higher stress, and we now can 

ratchet the system up or we can just say, you don’t do it. The containers are staying at the CSI port. They are not getting loaded. 

So that is what I mean. It is a system that is—it does what it 

does right now, and it does add security right now because it has 

the capability of detecting and, therefore, preventing and deterring, 

I believe, global terrorists, al Qaeda, from exploiting this system. 

It has some deterrent effect. But it is also a system that can be elevated when we need to do so. 

Senator COLEMAN. I would still maintain that we have a system 

with some holes in it. 

Mr. BONNER. I wouldn’t want to—I don’t rely totally on CSI. 

That is why we have a layered and a number of initiatives that 

are—that in combination give us greater assurance. But if the—nobody can say that you can develop a foolproof system, or at least 

a foolproof system that would not, in essence, choke off and stave 

off the flow of legitimate trade and do enormous harm to our economy. 

So whatever system we have to put into place, there is some balancing we have to do and should do to protect, as I have said, the 

American livelihoods as well as American lives. You have to balance that out as you do it. But part of that is extended border 

strategy, and CSI and C–TPAT are very much two of our important 

initiatives in terms of extending our zone of security beyond our little ports of entry and our border. 

Senator COLEMAN. Senator Carper. 

Senator CARPER. Thank you, Mr. Chairman, and Mr. Bonner, 

welcome. Looking around at these empty seats, you wonder where 

everybody is. We all have other hearings that we are trying to get 

to, as well. I have two others and I apologize for not being here to 

hear all of your testimony. 

Let me start by just asking, what are some of the possible consequences of our not doing a good enough job to reduce the security 

threats that our Nation faces that flow through our ports? What 

are the possible consequences of our not doing a good job? 

Mr. BONNER. They are great. A number of people, like Steve 

Flynn, who is going to testify for this Subcommittee this morning, 

who I talked to shortly after September 11, have outlined the—if 

there is a terrorist incident or a terrorist attack that utilizes, let 

34

us say, an oceangoing cargo container and we have no security system in place, the consequence was clear, and that is the whole system shuts down. It freezes, which would very likely send the U.S. 

economy in a tailspin and bring the rest of the world economy 

down with it. 

So those are huge consequences, no doubt about it. The question 

is, how do you build, and that is the question I faced shortly—

starting on the morning of September 11 and September 12, is how 

we would do this—how could we best do this. We are not complete 

yet, but how could we best do this in terms of building out a strategy that involves a number of initiatives, not just the two we are 

talking about today, to make it far more difficult, far less likely 

that this system can be exploited. 

I don’t think there is a perfect system that I am aware of. If 

somebody can devise the perfect system for providing the absolute 

security in terms of the movement of goods and cargo and at the 

same time do that without essentially choking off the flow of trade 

and the economic consequences of that, I am here to learn and listen, as I have been all along. But we have taken steps that are 

really some revolutionary initiatives. 

Senator CARPER. Let me just follow things here. 

Mr. BONNER. Yes. 

Senator CARPER. What are some of the things that you think we 

are really doing well? 

Mr. BONNER. Well, I think the things that we are—first of all, 

I would say I take it in layers. The very first thing we did was to 

say—and I said in talking to our people at U.S. Customs, we need 

to have some ability to sort out what may be a terrorist threat and 

what may not be a terrorist threat and we need to use advance information that we get electronically and automated targeting—we 

have to build our Automated Targeting Systems to do this. 

We have to establish a National Targeting Center so that we 

can—somebody said, well, you are only inspecting 5.5 percent. The 

question is, we are inspecting those not on a random basis, but on 

a basis using strategic intelligence as to what poses a higher risk. 

We know that some shipments pose no risk whatsoever. So how do 

you do that, though? How do you make that sort? 

And the very first thing we did, and I think we—by the way, it 

hadn’t been done by any country before, but it was to build—essentially mandate that we had to get advance electronic information 

about every single cargo shipment to the United States. Then we 

had to evaluate that against our historic Customs database in 

terms of things that would be unusual or anomalous about shipments, build in strategic intelligence about where the threat is, 

what countries are more likely to be a threat than others, and risk 

manage the terrorism issue. 

So I think that is not done, either. I mean, that is an evolving 

thing. We literally meet daily to assess intelligence that might and 

many times does change our targeting rules or tweak up our targeting rules that we use to decide which containers to inspect or 

not. 

The next thing, though, we did was to say, look, we don’t have 

enough people or detection technology at our ports of entry. That 

is why our ports of entry froze on September 12 and September 13, 

35

because if you increase inspections and you don’t have enough people to keep all lanes open 24/7, you increase inspections, you don’t 

have any detection technology so you are able to do it faster and 

speedier, your border is not going to be fluid. You are going to end 

up damaging the economy. 

And so we have added enormous detection equipment, both, by 

the way, large-scale X-ray imaging machines at the Northern border with Canada, at our major entry points, at our seaports, that 

didn’t exist—weren’t there before September 11. We have added radiation portal monitors. Ninety percent, right now, of the commercial trucks that come from Canada into the United States go 

through a highly sensitive radiation portal monitor. Eighty percent 

of all of the passenger vehicles, the SUVs, the cars, go through radiation portal monitors. We will have 100 percent of the Mexican 

border done this year with radiation portal monitors. We have 

about 50 percent now. We are rolling out to the seaports. 

Look, I think that is an important step. It is giving us a better 

way to detect against potential terrorist weapons, but to do it without laborious manual inspections of everything that would shut 

down our ports of entry, in my judgment. Now what we are talking 

about at this hearing is what have we done to extend our border 

outward and the two very key initiatives CSI and C–TPAT, that we 

put into place to do that. 

Senator CARPER. That may fall into my last question, and that 

is what are some of the quick layers we need to do better where 

we could be helpful? 

Mr. BONNER. I think one area that we do need to be better, to 

do better, and we have been talking about it at this hearing, and 

this Subcommittee and GAO and the staff here have been helpful, 

but the C–TPAT program is a trust-but-verify program. We are 

doing better with our validations, or verifying that the supply chain 

security commitments have been met. But we understand and we 

agree that we need to do more and we need to do more more quickly, because we do give a certain level of benefit, even though we 

have reduced it somewhat, to companies that we think are reliable 

and trustworthy who are certified, that is to say, they have told us 

that they are doing what they say they are doing in terms of supply chain security. 

But that is an area, look, it needs improvement. We do need to—

and by the way, we work on this literally every day. We do need 

to elevate, make sure that we are getting an even higher percentage of our request at CSI ports that are honored, that is to say that 

the security inspection is done by the host nation. We are above 90 

percent now, I believe, or an average of 90 percent—don’t hold me 

to the exact figure. But we have steadily moved that up. There are 

a few ports that are laggards and we need to—we are working to 

get that up, and our goal is to get pretty close to 100 percent, if 

not 100 percent, of all the requests of outbound containers unless 

there is some really good reason why it can’t be done. 

Senator CARPER. Is there anything in particular that Senator 

Coleman needs to be doing to help get this job done? [Laughter.] 

Mr. BONNER. Look, I think this Subcommittee and the Chairman 

have been very supportive, but that doesn’t mean that—I do not 

believe in oversight. I think it is a healthy thing that questions get 

36

asked. I want to make sure that if it is put in the right context, 

that people understand what we did, why we did it when we did 

it, and how fast we needed to do it, but on the other hand, these 

initiatives, I think, are good initiatives, but they can be improved. 

We want to work with the Subcommittee and GAO to make sure 

that we implement what are, I think, certainly in the main very 

sound recommendations that are going to help us make these programs better. 

Senator CARPER. Mr. Bonner, thanks very much, and Mr. Chairman, back to you. 

Senator COLEMAN. Thank, Senator Carper. 

Commissioner, I want to thank you for your appearance today. 

I do want to add my voice, by the way, to the concerns raised by 

Senator Levin regarding trash coming in from Michigan and the inability to sort out what is in there, whether there are things in 

there that could be very dangerous for all of us. So I would seek 

your personal assurance that you will work with this Subcommittee, work directly also with Senator Levin to see if we—not 

if we can, we have to improve that situation or fix it. 

Mr. BONNER. I agree. I share the concern, so I will work with you 

and Senator Levin on that issue. 

Senator COLEMAN. Thank you very much, Commissioner. 

Mr. BONNER. Thank you. Thank you, Mr. Chairman. 

Senator COLEMAN. Now, I would like to welcome our final witnesses for today’s hearing, Richard M. Stana, Director of Homeland 

Security and Justice Team at the Government Accountability Office; Retired Coast Guard Commander Stephen E. Flynn, currently 

a Jeane J. Kirkpatrick Senior Fellow for National Security Studies 

at the Council on Foreign Relations in New York City; and Stewart 

Verdery, a principal with Mehlman Vogel Castagnetti, Incorporated, here in Washington, DC, and the former Assistant Secretary of Border and Transportation Security Policy for the Department of Homeland Security. 

Gentlemen, I appreciate your attendance at today’s hearing and 

look forward to your testimony and perspective on CBP programs 

discussed here today as well as your recommendations for securing 

maritime trade and the global supply chain. 

As you are aware, pursuant to Rule 6, all witnesses who testify 

before this Subcommittee are required to be sworn in. I would ask 

you to please stand and raise your right hand. 

Do you swear the testimony you are about to give before this 

Subcommittee is the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. STANA. I do. 

Commander FLYNN. I do. 

Mr. VERDERY. I do. 

Senator COLEMAN. Please limit your opening statements to 10 

minutes. Your entire statement will be entered into the record in 

its entirety. If you can follow the amber lights, you will know time 

is about up. 

Mr. Stana, we will start with you. We will then go to Commander Flynn and then we will go to Mr. Verdery. Mr. Stana. 

37

1The prepared statement of Mr. Stana appears in the Appendix on page 66. 

2See Exhibits No. 8 and 9, which appear in the Appendix on pages 115 and 154 respectively. 

TESTIMONY OF RICHARD M. STANA,1 DIRECTOR, HOMELAND 

SECURITY AND JUSTICE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. STANA. Thank you, Mr. Chairman. I appreciate the opportunity to appear before you today to discuss the results of our reports on the C–TPAT and CSI programs.2 As you know, these programs are key elements of CBP’s multi-layered strategy to address 

security concerns posed by the 9 million cargo containers that enter 

U.S. ports each year. Getting these programs right is important if 

we are to prevent terrorist weapons of mass destruction from entering the country. In my oral statement, I would like to highlight 

some key points we make in those reports, starting with the C–

TPAT program. 

C–TPAT membership is open to all components of the supply 

chain, including shippers and importers. In return for committing 

to making improvements to the security of their shipments, C–

TPAT members receive a range of benefits which significantly reduce the level of scrutiny provided to their U.S.-bound shipments. 

These benefits can reduce or eliminate inspections at the ports and 

reduce wait times for members’ shipments. While this arrangement 

seeks a reasonable balance between enforcement and trade facilitation, CBP’s process for verifying the members’ security arrangements has several problems that could increase security risks and 

throw the intended balance a bit off center. 

The first problem is that CBP awards the benefits which reduce 

or possibly eliminate the chances of detailed inspection at the ports 

without verifying that members have accurately reported their security measures and that they are effective. When companies apply 

for the program, CBP reviews their self-reported information about 

their security processes and checks their compliance and violation 

history in various databases. If it certifies a company after this indirect review, which it has in most cases, the benefits begin in a 

few weeks. 

Since the program’s inception in 2002, CBP has directly reviewed 

and validated members’ security procedures for only about 11 percent of the companies it has verified. More importantly, this figure 

goes down to 7 percent of the certified importers, and this group 

of members receives the greatest number of benefits. Moreover, it 

is unclear whether the other 89 percent could have serious 

vulnerabilities in their supply chain security and still be awarded 

program benefits. 

The second problem is that the validation process itself is flawed. 

For the 11 percent of companies that have been validated, CBP did 

not take a uniformly rigorous approach to reviewing the security 

procedures. Validations are supposed to verify that security measures are in place and are effective. However, CBP typically examines only a few facets of member security profiles and CBP and the 

company jointly agree on which security elements are reviewed and 

which locations are visited. In some cases, the majority of a company’s overseas supply chain was not examined. 

38

Further, CBP had no written guidelines to indicate what scope 

of validation is adequate nor a baseline standard for what minimally constitutes a validation. C–TPAT program officials say that 

validation is not intended to be an audit of voluntary members, but 

the review that is done does not always add up to a reliable assessment of supply chain security. 

A third problem is that CBP has not determined which and how 

many members need to be validated and how many staff it needs 

to devote to this important activity to mitigate security risks. Although it initially intended to validate every C–TPAT member, 

CBP devoted an inadequate number of staff to do that. In August 

2004, it began using what it calls a risk management approach to 

prioritizing which members should be validated first, as resources 

allow. CBP has established some selection criteria, such as import 

volume, value of imports, and method of transportation. While this 

is a step in the right direction, CBP still needs to determine the 

validations that are needed to help assure that members deserve 

the benefits that they are awarded. 

CBP is addressing the management weaknesses we noted in our 

July 2003 report, but it still has a ways to go in some areas. It 

hasn’t yet completed a human capital plan and it hasn’t developed 

its performance measures fully and importantly. Our review disclosed that its basic records management system was in such poor 

shape that we could not rely on it to gauge program operations or 

reconstruct management decisionmaking. 

Turning now to the CSI program, we found some positive factors 

that have affected CBP’s ability to target and inspect high-risk 

cargo shipments at foreign ports before they leave for the United 

States. Among these are improved information sharing between 

CBP and foreign customs staffs and a heightened level of bilateral 

cooperation and international awareness of the need to secure the 

whole global shipping system. 

However, our work also disclosed several significant problems in 

the CSI program. One problem is that about a third of the cargo 

containers leaving CSI ports are not fully screened before they depart. This is because diplomatic and practical considerations made 

it very difficult to fully staff certain ports to the level prescribed 

in its staffing model. This has limited CBP’s ability to screen all 

shipments leaving some CSI ports. 

Also, CSI hadn’t yet determined which duties require an overseas 

presence, like coordinating with host government officials, and 

which duties could be performed in the United States, like reviewing manifests and databases. Given the diplomatic and logistical 

consideration and the high cost of stationing staff overseas, CBP 

needs to consider shifting work to domestic locations where feasible. 

Another problem is that not all cargo containers that are 

screened and referred to host nation customs officials for inspection 

are actually inspected before they leave the ports. Reasons for not 

inspecting these containers include the availability of host nation 

information that suggests that a container might not pose a security risk, the host nation’s customs officials could not get to the 

container before it left the port, and in 1 percent of the cases, a 

39

host nation inspection denial, most often because the risk identified 

relates to a customs violation rather than a security concern. 

Our audit check of a 3-month period found that CBP can and 

does inspect most of these potentially risky containers when they 

arrive at U.S. ports. However, we were unable to verify that 7 percent of these containers that were referred for state-side inspection 

were actually inspected upon arrival. I think this might have been 

a point of confusion in Chairman Collins’s note that 93 percent 

were inspected. That number was not the percentage inspected at 

CSI ports. That was the ones that were not inspected at CSI ports 

and referred to U.S. ports for inspection and documents show an 

inspection was done. As the Commissioner mentioned, CBP also 

has issued ‘‘do not load’’ orders in a few cases where it felt strongly 

about the need to inspect a container before it arrives at a U.S. 

port. 

A third problem involves the lack of minimum technical requirements for inspection equipment. Both CSI ports and U.S. ports rely 

heavily on non-intrusive inspection equipment, such as various 

types of X-ray and gamma ray imaging machines, to conduct inspections of cargo containers. Equipment used at various CSI ports 

can differ in their penetration capabilities, scan speed, and several 

other factors. Without minimum technical requirements, CBP has 

limited assurance that the equipment in use can successfully detect 

all weapons of mass destruction. It is important that CBP establish 

such requirements because non-intrusive inspections at a CSI port 

may be the only inspection some containers receive before they 

enter the interior of the country. 

Finally, CBP has made several improvements to the management of the program, but some problems still exist. To its credit, 

it has made some progress developing a strategic plan and performance measures, but further refinements are needed, particularly 

with developing meaningful measures of bilateral progress, terrorism deterrence, facilitating economic growth, and not disrupting 

the flow of trade. 

In closing, we made a number of recommendations aimed at addressing procedural, staffing, technical, and management problems 

we identified in the C–TPAT and CSI programs and we are encouraged by the constructive tone of CBP’s response. It is very important to resolve these problems as soon as possible, because in 

CBP’s multi-layered strategy for mitigating the risk of a weapons 

of mass destruction being transported in cargo containers, any 

weakness in one program or layer could affect the other layers. 

Mr. Chairman, this concludes my oral statement. I would be 

happy to answer any questions you or other Members of the Subcommittee may have. 

Senator COLEMAN. Thank you very much, Mr. Stana, and thank 

you for the good work being done by the staff and the folks at GAO 

on these reports. It has been very helpful and really outstanding, 

so I just want to say thanks. 

Commander Flynn. 

40

1The prepared statement of Commander Flynn appears in the Appendix on page 94. 

TESTIMONY OF STEPHEN E. FLYNN,1 COMMANDER, U.S. COAST 

GUARD (RET.), JEANE J. KIRKPATRICK SENIOR FELLOW IN 

NATIONAL SECURITY STUDIES, COUNCIL ON FOREIGN RELATIONS, NEW YORK, NEW YORK 

Commander FLYNN. Good morning, Mr. Chairman. It is an honor 

to be here this morning to talk about this absolutely vital issue. I 

really want to commend you and the Subcommittee and the Committee for taking the container security issue on. 

I have been somebody who has been working the container security issue for well over a decade. I want to start by saying this has 

been a longstanding vulnerability which went largely unrecognized 

prior to September 11. Even in the immediate aftermath of September 11, there was not a whole lot of activity happening across 

the U.S. Government, and I commend Commissioner Bonner for 

grabbing this issue when the Department of Transportation was 

otherwise focused on aviation and when the Coast Guard focused 

on ships and terminals but wouldn’t go after the cargo issue. That 

leadership should be applauded. 

But, of course, where we are at right now is how to deal with 

an issue of enormous stakes, as we have been talking about, and 

how we can move this thing forward. What I would like to do in 

the few minutes I have here to provide oral testimony, is talk about 

the stakes, my view of the threat, and how I believe that C–TPAT 

is missing that threat in how it is currently operating and some 

suggestions, recommendations on how we could move forward. 

I think the best way to illustrate the stakes is to bifurcate them 

in two parts. One is that the container system, the intermodal 

transportation system, could be a conduit for a weapons of mass 

destruction. That is the one that consumes the bulk of our attention. The second issue is that the system itself is targeted, our 

trust in it erodes, and we stop using it for a while, and that could 

potentially lead to a global recession. 

Now, those stakes are, I would argue, national security imperatives of the first order. We have to deal with those two problem 

sets. But the best way to illustrate the second one is to visit a place 

like Hong Kong, the world’s busiest container port in the world and 

the busiest terminal there is one called HIT Terminal. I was there 

a little over a year ago with the brilliant Malaysian who designed 

the operation of that terminal in 1992 to handle 3.1 million containers per year. 

Today, HIT Terminal is moving 5.5 million on the same footprint, 

on the same square acreage. That entails 10 Panamax or postPanamax container ships being loaded simultaneously with 3 to 4 

gantry cranes per ship, 35 moves per crane per hour, 24 hours a 

day, 7 days a week, 365 days a year. He quipped that ‘‘we no 

longer take off Chinese New Year.’’ There is a 1-hour slippage time 

between ships. 

Now, when something goes wrong, such as the computers go 

down for 30 minutes, they will snarl truck traffic throughout the 

Port of Hong Kong. If it goes down for 2 hours, the trucks back up 

to the Chinese border. A little over a year and a half ago, they told 

me they had a typhoon come through where they had to shut the 

41

port down for 96 hours and they had a 140-mile backup of trucks. 

Between 16,000 and 18,000 trucks were queued up into the Chinese mainland. 

This is a system of incredible fragility, that if we have a disruptive event, the cascading effects are immediate and have significant 

economic repercussions. 

Now, it is also, therefore, a system that is very difficult to police. 

C–TPAT and CSI, of course, are designed to help advance that. The 

concepts of obviously targeting before it is loaded and getting the 

private sector to be a partner in this process makes sense. The critical issue that I have separated myself from where CBP is going 

with this is the notion that CBP can identify the right 5 percent 

and put this through the scrutiny of, to put it in the words of Commissioner Bonner, the 100 percent of the right 5 percent and presume the other 95 percent is low-risk and does not require inspection, whether overseas or even here at home. 

The central problem with this premise is that its view is that 

CBP has the ability to identify this high-risk universe, which would 

clearly require that CBP has a level of intelligence CBP does not 

have for this adversary. 

But second, it is that Customs believes that that universe where 

the terrorists are most likely to exploit would be the places that 

make up the shadow world CBP has learned about by failure for 

customs compliance in the past with trade laws and so forth, new 

players we don’t know much about, so they have no track record, 

or they have had a history of smuggling before. The assumption is 

that a terrorist intending to bring in a weapon of mass destruction 

into the United States would gravitate towards the place where 

CBP already sees aberrant activity. That is what CBP targets. CBP 

inspects that, but assumes that terrorists wouldn’t gravitate to legitimate companies. 

Where I would argue that this is wrong-minded is that in the 

case of a smuggler, it is an ongoing conspiracy. He has to be in the 

shadow world. He does not smuggle drugs in once, or he does not 

violate a revenue law once. He does it as an ongoing conspiracy. 

And if he goes to a legitimate company, they have controls and over 

time, and he is going to get caught. So that doesn’t make any 

sense. 

That is a different problem from the lower-probability, high-consequence risk of a weapon of mass destruction being put in the 

United States with the goal of setting it off. In that situation, he 

is happy to succeed once, and it may have taken him 2 or 3 years 

to acquire the weapons. And so if he is somebody who is interested 

in carrying out the strike and CBP has already advertised up front 

that this legitimate company’s 95 percent universe is viewed as 

low-risk and not subject to even the most cursory inspections, that 

is where he will focus his attention and he is going to take the time 

to do it. 

It turns out we are expecting too much from private sector companies to secure themselves with a fail-safe approach. Security in 

any private sector, if you talk to any chief security officers as I do, 

is much like other audit systems. You look for behavior over time. 

A good security system is one that has trip wires in the company 

to see whether or not the rules are being violated, has an investigaVerDate 0ct 09 2002 11:43 Dec 05, 2005 Jkt 021825 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 C:\DOCS\21825.TXT SAFFAIRS PsN: PAT
42

tory arm to go out and check on the behavior, has a sanctions system for people caught violating the behavior that sets a deterrent 

across the company that employees should play by rules or you are 

going to have a consequence. You are going to go to jail or you are 

going to lose your job. It is a reactive system, in other words. No 

system is designed to protect the system for the first offense. 

Basically, bringing a weapon of mass destruction into the United 

States in the 95 percent universe CBP is defining as low-risk is as 

simple as a large payment to a truck driver to take an extra-long 

lunch break so as to gain access to that load, and you are on your 

way. 

So my concern is, not that we are getting companies to be a partner in this process, but that automatically creates this 95 percent 

low universe that doesn’t warrant CBP checking. Even today, CBP 

focuses their attention on the high-risk universe of what CBP has 

found these problems. But I am very concerned about this 95 percent low-risk, and let me push it a step further. 

It is not only that I believe that it is the richest opportunity for 

somebody to get in once, into the United States to cause this event. 

I also believe that—and this takes a little more sophistication on 

their part—if the goal is mass economic disruption, the kinds of 

things Osama bin Laden has been talking about, they will want to 

strike that low-risk universe because it will then invalidate the regime, the entire—all containers will look at high-risk. 

So this leads us to rethink how we do inspections. Building on 

C–TPAT, building on CSI, which are minimal approaches, one is 

we have a greater assurance that companies are living up to the 

security obligations. We talked about the issue of jurisdiction today 

being a problem, it is clearly an issue. The lack of capacity and resources is an issue. We have ways to solve this. It is called thirdparty independent auditors, folks who are bonded to do this job, 

and you audit the auditors. It is the kind of format the Coast 

Guard uses routinely through outfits called the Professional Classification Society like the Bureau of Shipping. Resident technical experts go out and check, and the Coast Guard check, the checkers. 

Customs has been reluctant to go to this approach, and frankly, 

I don’t understand why. It is a way you can get in overseas jurisdictions and you can have a validation process relatively quickly 

deployed. 

The second piece, though, is that we have to move to a system 

where we validate low-risk as low-risk. This is not a physical inspection of everything moving through. And I want to highlight 

specifically an initiative that I have been involved with in the Port 

of Hong Kong. The Port of Hong Kong today has an initiative 

where every truck coming into that busy terminal, I just described, 

is going through a radiation portal, a gamma imaging, an optical 

character recognition capturing the container number and putting 

it into a database. Right now, there are about 180,000 images sitting in this database since January 1. Nobody in the U.S. Government has asked them to do this. It is being funded by the Container Terminal Operators Association, and a U.S. company has 

been involved with it, SAIC, has put the equipment together. But 

nobody in the U.S. Government has told them that this is desirable 

behavior. 

43

1The prepared statement of Mr. Verdery appears in the Appendix on page 102. 

Now, their interest in capturing this data up front is really 

threefold. One is the ability to deter for every box, that low-risk 

universe as well as what we would target as a high-risk universe, 

that it is going to get scanned and we are going to raise the risk 

of detection. If you spent 3 years getting a weapon of mass destruction, do you want to put it into a system where everything is getting scanned and hope it is not detected? 

The second piece that makes this an attractive approach is if, 

God forbid, something happens, they have the black box. They have 

the forensic tool that you can go back and say, it came from the 

Port of Hong Kong but it was specifically this supply chain. We 

may have missed it, but here is the tape. So we indemnify the port 

and we isolate the problem to a supply chain. That keeps the whole 

megaport from coming down. The kind of dump the concourse problem we see in airports. They can avoid that. 

And the last piece that has value for them is the current process 

of targeting, this typically requires a pulling of the box from the 

stack, dragging it over to the one inspection facility, putting it 

through the same screen that can be done up front, costing the importer the money to do it there, disrupting the terminal operation, 

and likely missing the voyage. And what they see as attractive 

about this is you can do that virtually and 99 percent of the time 

resolve the kind of questions that a CSI targeter would have by 

just looking at the image in real time, and you can look at them 

here in Virginia or you can look at them in Hong Kong or wherever 

you want to go. 

That system, we could migrate globally quickly, and it is not the 

end of all ends, but it is a layered approach in which we move 

away from saying there is a very finite universe of high-risk things 

and instead which we apply more broadly across. 

And so I would in conclusion here make the recommendation we 

need to be thinking about a validation process that low-risk players 

are low-risk. A birth certificate, the starting process, third-party 

independent players, a tracking as it moves through, a vetting at 

loading port. This is in the realm of technically possible, commercially possible. We just need to move forward aggressively. 

Thank you very much, Mr. Chairman. 

Senator COLEMAN. Thank you. Mr. Verdery. 

TESTIMONY OF C. STEWART VERDERY, JR.,1 PRINCIPAL, 

MEHLMAN VOGEL CASTAGNETTI, INC., ADJUNCT FELLOW, 

CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, 

AND FORMER ASSISTANT SECRETARY OF BORDER AND 

TRANSPORTATION SECURITY POLICY, U.S. DEPARTMENT OF 

HOMELAND SECURITY 

Mr. VERDERY. Thank you, Senator Coleman, for the chance to be 

here today. As was mentioned, I am a principal at the consulting 

firm of Mehlman Vogel Castagnetti. I am also an Adjunct Fellow 

with the Center for Strategic and International Studies, but the 

views are my own that I will explain today, and I would just go 

over a couple of the key points because I know we have been here 

for a while. 

44

As you know, I was Assistant Secretary for Border and Transportation Security Policy and Planning for the last 2 years, until my 

resignation earlier this spring. I was responsible for immigration 

and visa policy, transportation security, as well as cargo security, 

largely carried out in the field by CBP, ICE, and TSA. I would be 

remiss if I didn’t thank the Committee for your outstanding efforts 

to support DHS during my tenure—the intelligence bill probably 

the most famous—but also your oversight responsibilities were very 

helpful in focusing our energies and making us do a better job. 

The point of today’s hearing, I think, is to understand that this 

is a layering of programs, and while we are focusing on two very 

specific and important programs, CSI and C–TPAT, they are not 

the only programs that are relevant and they shouldn’t be looked 

at in a vacuum. I think Commissioner Bonner talked eloquently 

about the layering that CBP is responsible for, but it is really beyond CBP, and I will talk about that in a second. 

I strongly disagree with any analysis, such as the press accounts 

we have seen the last couple days, that somehow suggests we are 

worse off with CSI and C–TPAT and the related programs that 

they undergird than we would be without them. There are minor 

flaws that need to be fixed—some of which already have been—due 

to budget or operational concerns or technology limitations or international agreements, and they have to be worked on, but that 

should not lead one to the conclusion that we are better off without 

them. It is not an either/or proposition, as the title of the hearing 

might suggest, and I know people make hearing titles to be catchy, 

but it is incremental progress that should be considered that the 

Department and the Congress supported their programs and we 

need to think of it in that light. 

Now, I will say, having looked at some of the major other issues 

that we face in Homeland Security, we have done more in other 

areas to come up with an overall strategic plan. You think of visa 

policy, you think of entry/exit, you think of aviation security, intelligence gathering. With cargo and supply chain security, we have 

not really done that. 

The programs we talked about are part of that, but they are not 

a plan in and of themselves, the programs that CBP and the Coast 

Guard and other parts of our government implement, and that is 

why, at the direction of Secretary Ridge and especially Deputy Secretary Loy last year, we were instructed in my office to build a National Strategic Plan for Cargo Security. For any of you who were 

at the cargo summit that DHS put on in December, you saw the 

first draft of that. It is a public document. That is now being reviewed within the Department as part of Secretary Chertoff’s second-stage review, and my understanding is that will be something 

that he is focusing on moving forward throughout this summer. He 

is coming up with a rubric under which all programs can be handled. 

Let me talk about a couple of things that are beyond CSI and 

C–TPAT just for a second before returning to this. 

I do agree with the witnesses today. We do need a zero tolerance 

for weapons of mass destruction and to devote whatever energies 

it takes to build that into our system. It is a layered approach, but 

we have to have that as a 100 percent layer along the way at some 

45

point, preferably overseas, if not overseas then domestically. And 

so we are moving in that direction with the procurements and the 

deployments we have talked about. I think it is absolutely critical 

that we rely on our Science and Technology Directorate who has 

come up with a procurement announcement earlier this year to get 

the best equipment out there and to have standards. 

I also would encourage the Congress to support the proposed Domestic Nuclear Detection Office, the DNDO, as a great opportunity 

to coordinate efforts that do cross agencies within DHS and even 

beyond DHS in this absolutely critical area. 

The second phase that is beyond these programs is the Maritime 

Domain Awareness Effort led by the Coast Guard and the Navy 

under Homeland Security Presidential Directive 13, signed last 

winter. This will bring visibility into shipments between when they 

leave a foreign port and when they arrive domestically. Couple that 

with the improvements in in-transit protection that we need, first, 

a regulation that is in the works on mechanical seals, subsequently 

with high-tech seals or so-called ‘‘smart boxes’’ to provide detection 

notification. Those are things that will bring a measure of accountability between departure and arrival that we absolutely need. 

Turning briefly to CSI and C–TPAT, I completely agree with the 

GAO’s suggestions in many respects, and I found their work to be 

very helpful in my responsibilities and think they do a great job. 

In terms of CSI, I think that CBP does need to redouble efforts 

to get people overseas to support these efforts. Deploying people is 

not an easy thing. We worked on it in many other programs besides CSI, and finding the space to get these people overseas, getting the agreements in place with the State Department is not simple. So it does take time and people have to be somewhat patient. 

I am not sure I agree with the suggestion that we should be returning those people back to the United States to do work here. 

Once we get people overseas and have gone to that trouble, we 

ought to be having them work more with host governments to develop leads, to work with local law enforcement and customs officials to figure out the best ways to make that targeting the most 

effective we can. That can only be done overseas, working with people on the ground. 

I also would recommend that people try to make these deployments for as long a term as possible to develop those long-term relationships and not have people deployed on TDY basis. 

In terms of C–TPAT, I am heartened that CBP, working with 

myself and Under Secretary Hutchinson, have increased the number of validators that are coming online to make the system more 

whole. I do agree that—and I take some blame here in not coming 

up with this idea myself—there should be a tiering among the companies that have been accepted or certified but not validated, and 

I think it is an entirely appropriate measure of risk management 

to have a tiering for companies that have essentially made promises that have not been confirmed. 

It does strike me that these companies have track records in 

dealing with the government that ought to be considered and that 

they should be given some measure of benefit, but not the full benefits that are given to fully certified C–TPAT members. 

46

The last thing I want to mention in my oral remarks is the need 

for a more broad, more expansive policy office within the Department. I noted with some irony that neither of the GAO reports 

even mentioned the fact that there is any type of policy oversight 

within the Department for CBP or any of the other agencies at the 

bureau level. We see that this issue really does cover issues beyond 

CBP’s responsibilities, especially on the international front, and the 

reports don’t even mention a DHS policy coordination effort or a 

BTS policy coordination effort and I think that speaks volumes of 

the dilemma that we have. 

The work has to be coordinated between Coast Guard, between 

TSA, between the Science and Technology Directorate, and especially overseas, where we need to bring the full weight of the DHS 

relationship to bear on each of the programs. We should not be 

having Customs overseas negotiating separate agreements, and the 

Coast Guard overseas, ICE, and TSA, they need to be worked together. And so my hope and my expectation is that the Department 

will come up with a robust policy office providing guidance to all 

the operational bureaus as well as managing international affairs 

as part of the Secretary’s second-stage review that is ongoing. 

I thank you for the chance to be here today. I look forward to 

your questions. 

Senator COLEMAN. Thank you very much for your testimony. 

I want to go over a couple of things that Commissioner Bonner 

stated. He indicated very clearly that all high-risk containers overseas, if they are not inspected overseas, are inspected when they 

get here. Was GAO able to verify that? 

Mr. STANA. No. In fact, of the 65 percent of the containers that 

were classified as high-risk and were reviewed by the staff overseas, our detailed work at the ports suggested even within that 65 

percent, there is no guarantee that all those were high-risk or not 

high-risk. That is the first point. 

The second point is when the CSI port people call the U.S. port 

people and notify them that they couldn’t get it inspected for whatever reason, we found no records that could assure us that in all 

cases the inspection was done stateside. So we don’t have the high 

level of assurance that Commissioner Bonner has. 

I might add also, if you recall, about a year ago, we did some 

work on the ATS system and there were some problems there identifying cargo risks and making appropriate designations. This 

whole CSI system is predicated on ATS. 

Senator COLEMAN. Explain ATS. 

Mr. STANA. ATS is the Automated Targeting System, the system 

of rules that Commissioner Bonner was describing. There are many 

of them, hundreds of rules that, based mainly on manifest data, 

create a point score and risk designation. 

We found problems with the ATS system that suggests that it 

also is not absolutely reliable in identifying high-risk cargo. 

So you put those three together and it suggests problems. I understand where he is coming from, but I wouldn’t speak with the 

same level of assurance. 

Senator COLEMAN. Mr. Verdery says we are not worse off, but I 

think one of the problems here is that we have a system based on 

47

an ATS system of which there are concerns about it, the system 

does a good enough job identifying the risk. 

Commander FLYNN. Well, it is true that we are probably not 

worse off because we have these systems in place. In fact, they are 

good faith efforts, as you pointed out. 

The problem is, is that when you rely on these systems to do the 

things that they are designed to do and they don’t, it creates other 

vulnerabilities. For example, in some ports, if a container came 

from a CSI port, they may reduce level of inspection or eliminate 

it, not necessarily on a point score but because it came from a CSI 

port. 

Senator COLEMAN. I am not arguing with you, Mr. Verdery, in 

terms of worse off, but I worry about a false sense of security. I 

worry about increased vulnerability because of reliance upon a system that, at its core, has a few challenges. 

Commander FLYNN. I might just highlight, and this speaks to 

the need for the coordination, but the National Targeting Center, 

for instance, isn’t hooked up to the Office of Naval Intelligence or 

Coast Guard’s efforts to target based on maritime data. 

But that targeting effort is based on prior history. CBP is really 

operating in terms that past performance equals future results. If 

you have been shipping terrorist-free for 2 years and you have been 

complying with Customs rules, you are viewed as no risk of terror 

having compromised a global supply chain. Now, that is just something that no company can achieve and one that we can’t have 

automatic confidence in. It is not that we can’t find scary places, 

but the underlying intelligence that goes into the ATS system is 

very weak, as we know from just the intelligence that we have 

about this adversary overall. 

So it is all built on that edifice of Automatic Targeting System 

primarily with just applying it overseas. CBP is getting it early 

enough that CBP can do some analysis and ask a few more questions. But the rest of that universe is viewed as something CBP 

does not need to look at, and I think that is problematic. 

Senator COLEMAN. I am going to come back to the issue of auditing and what that means, but I just want to follow up on another 

thing the Commissioner said. He was pretty confident that, with 

one exception, the non-intrusive equipment that is being used at 

the CSI ports meets or exceeds what we have here. Would you concur with that? 

Mr. STANA. We are doing some work on that issue right now. We 

are doing a technology assessment of the different non-intrusive inspection equipment being used. But I will say this. In our classified 

report, you may recall a chart that we had of three different types 

of equipment. They had different scan speeds, they had different 

penetration abilities, and so on. They are not all the same. Some 

may be better off in some areas, some may be better off in others. 

But what we are suggesting isn’t so much to set a standard so 

that one port improves or that one country improves. What we are 

suggesting is, is you may want to set a standard so that you have 

scan speed and penetration ability that is consistent so that when 

you get an inspection done, it is a consistent inspection and you 

can have confidence in it and you don’t need to reinspect the cargo 

container. 

48

Commander FLYNN. Mr. Chairman, if I can on that issue, one of 

the biggest problems is the disconnect, between radiation portal 

monitors and gamma scanning and whether or not detection can 

happen. CBP may have good equipment, but when they are not 

used together, the central problem is this. 

Radiation portals won’t help you with shielded weapon, which 

would be a loose nuke. It won’t help you with a shielded RDD, a 

dirty bomb. And it won’t help you with highly-enriched uranium 

because it doesn’t give off enough of a signature vis-a-vis the background. So to rely primarily on a radiation portal technology, it is 

not helping us with the scariest problem set. 

But when you have a radiation portal, it forces the shielding because they know you could detect it for the dirty bomb problem, 

particularly. Then your imaging would say there is a big cylinder 

object or whatever here in the middle of a shipment of sneakers. 

That is a problem. 

So part of the issue is DOE has been marching off deploying radiation portals entirely isolated from DHS’s effort. DHS only uses 

the gamma for a very small population, because that is all they 

have the resources to do. They ask other countries to apply it in 

the same way. And these two worlds haven’t come together. 

So it is not the technology itself is a problem, it is how we integrate the technology, how we integrate it with data. 

And I will just highlight another issue, keeping the information. 

We are not storing the information after we get these images. Storage is cheap, but CBP is tossing it away. CBP is basically throwing 

away a forensic tool if something went wrong, or even a tool that 

CBP can learn from over time. I don’t understand why that is happening, but for stuff coming across the Canadian border, as soon 

as the image is taken, within a day or so, the image is gone. CBP 

dumps it. It makes no sense that CBP is not storing this and trying 

to learn from it, as well. 

So it is the technology has limits, but it is more about how we 

integrate it, how we interface with software, how we use human 

judgment as a part of the process. 

Mr. STANA. And if I could just add one more thing, most of the 

detection equipment we are speaking of is aimed at nuclear or radiological threats. There are other types of weapons of mass destruction that we do need to focus on and to build some standards 

around. 

Senator COLEMAN. Let me talk a little bit about the audits. As 

I was listening, Commander Flynn, to your testimony, I was wondering, where are you going with it? In other words, what are you 

proposing? What is the solution? 

Commander FLYNN. We have a system now that if you talk about 

the system of terrorism it is not going to be a pattern, all you have 

to do is one shot, you have to get it through, so the thing that we 

are looking at now of narcotics and other things are based on, as 

you said, somebody continuing to use a system and figuring out a 

way to avoid it. So the best targets, I think the soft targets are 

those operations that have been ‘‘validated,’’ that, in effect, really 

almost guarantee not being checked further. 

If there was one concern I had with the Commissioner—one 

other concern I had with the Commissioner’s testimony was even 

49

though there is a tiered system right now, the fact is that you are 

giving, in effect, carte blanche to companies that have not been audited, clearly not been audited. 

Mr. STANA. Yes. I think that is a cause for concern. I heard the 

tier approach. I think it is a step in the right direction, but the fact 

of the matter is, with the vetting process, you are assuming that 

the kinds of vulnerabilities that you addressed in the past are indicative of the security chain vulnerabilities of the future, and this 

assumption is made without a validation. What they are doing is 

giving a number of benefit points to a vetted company without validation, and the number of points is sufficient to move them from 

a high-risk category to a low-risk category. 

Senator COLEMAN. In part, is the problem of validation perhaps 

almost—perhaps a difference in philosophy? Customs and Border 

Protection isn’t really talking about auditing. Even their validation 

is not an audit. Commander Flynn, you ultimately said that you 

have to audit the auditors. That is an audit. 

Commander FLYNN. Right. 

Senator COLEMAN. And what I am not hearing in place today is 

a system in which GAO actually would consider an audit. 

Mr. STANA. Or at least a reasonable examination of the supply 

chain security. What is happening is you have the CBP and the 

company agree to what CBP will look at, and oftentimes, it is not 

the crux or even the majority of the operation, and that is troublesome. 

Mr. VERDERY. If I could just suggest, I think that in my prepared 

remarks, I talked about the consideration of turning parts of C–

TPAT into a baseline regulatory regime. Not all of it is probably 

suitable to go into your typical statutes and regulations, but as we 

load up more and more bells and whistles onto essentially a voluntary deal, I think the time has come to consider whether or not 

this should apply to all players, all importers and other folks in the 

supply chain, and also, I think, provide a degree of transparency 

into how these processes are done. 

As I understand it, the recent changes on the tiering were announced by E-mail. I am not sure this is the way government business ought to be handled. And I do think that a regulatory baseline 

in some respects of C–TPAT would provide that kind of—it is not 

going to be an audit, but it would provide that kind of level of assurance that you might give the public more confidence. 

Now, I don’t think people should take too much the fact that 

something is validated: That is a snapshot in time. That is no guarantee that a week later, things haven’t changed. So I don’t think 

you can divide the world into black and white. These are companies 

we have to have ongoing relationships with and a regulatory regime might be a way to make that more productive. 

Commander FLYNN. If I can, Mr. Chairman, where I am going 

with this is this validation is the entry-level argument, so it is the 

birth certificate process. Agreed-upon protocols, somebody goes out 

and checks that the company is actually living up to them. Sarbanes-Oxley style, basically. Are you living up to the controls? It 

is not done by the U.S. Government, it is done by folks who are 

skilled at auditing. And then DMS checks the checking process. So 

that is the kind of mechanism there. 

50

But then to assure that, in fact, this is happening, that the lowrisk is staying low-risk, you have confidence it was stopped, you 

are tracking it through and you are spot-checking along the way. 

It doesn’t have to be 100 percent because terrorists don’t have unlimited resources or unlimited weapons of mass destruction. If, in 

fact, it looks like the deterrent—the probability of success in the 

system looks not so good, even 50/50, they are going to go another 

route. 

So by building this robustness to it—but my nightmare scenario 

now is the weapon of mass destruction will go off in Minneapolis 

and it will come via a C–TPAT company on a C–TPAT-compliant 

carrier through an ISPS-compliant port, an ISPS-compliant ship, 

and the entire regime will fall apart because we didn’t build the 

controls in up front to give us confidence in it. 

Senator COLEMAN. It is pretty sobering. I sense in your testimony about keeping data, in part what you are saying is if something does happen, you can at least identify this is the problem so 

that the entire system is not cast aside? 

Commander FLYNN. To deal with the incident, the analogy I 

would use, Mr. Chairman, is the black box in an airplane. We don’t 

put them in there because they are free and because they make the 

planes fly better. But every time—the rare times that jet airliners 

fall out of the sky, if the only thing that the aviation industry and 

the government did was shrug and say, it doesn’t happen very 

often, it is one in a million times, people wouldn’t get back on 

planes. 

Having the tools and the system to verify even after, to support 

the investigation, so as to find an isolated supply chain that was 

a problem. CBP can focus on it. It means you don’t have to close 

the border with Canada. You don’t have to close the seaports 

around the country. But if you can’t do that, you have to assume 

everything is at risk, and that becomes a real problem for us. 

Senator COLEMAN. My problem may be definition of terms. We 

talk about things being certified. In the public’s mind, I think they 

think certification has some really strong value. This is USDA-certified Grade A meat or whatever. Somebody has looked at it. Somebody has inspected it. Somebody then checked it out and they have 

made a judgment. 

And what we are having here is we have application, certification 

really being looking at paperwork, just looking at paperwork and 

trusting—this is trust but not verify—that you got what you got. 

That is a far cry from certification. 

And then in terms of validation, you can have validation which 

is not validating this is the way the system works. What you are 

looking at, it is the blind man and the elephant. You are literally 

looking at one little piece of it that may or may not be representative of the rest of the system, and you are looking at a piece, by 

the way, that you have agreed up front to look at. 

So it is a kind of thing that FDA wouldn’t do. So that is my concern, that we have phrases here—certification, validation—that I 

don’t think meet the standard definition that most folks would 

think about. And again, when we go back to the risks here, they 

are pretty significant. 

51

Let me ask a question, though, about validation, even the system 

that we have. It seems to me the program is growing very rapidly, 

but we are only validating a small percentage. Is that problematic? 

Mr. VERDERY. They have to catch up, and I think they are catching up. Bringing on these validators, you have to get them hired 

and trained and the like and they are catching up. I think you 

heard the Commissioner say 11 percent are validated now and they 

have 40 percent in the works. I do think that the recruitment efforts, perhaps, ought to take a back seat for a while to the validation efforts. 

Sir, if I could just—I think, essentially, you have a situation 

where you have an interim security clearance. We allow those in 

other types of situations. And the question is, do you provide any 

kind of benefit for somebody at that level? I think it is a reasonable 

risk management tool to give some benefit, even if you are not 

going to give a full panoply of benefits. 

And again, I think people would be a lot more comfortable with 

this whole rubric or regime if at one point along the way there was 

a 100 percent check for WMD, and that, I think, has got to be a 

priority, to get those machines out, preferably overseas. Where we 

can’t get them overseas, have them domestically. I think that 

would provide a kind of a backbone to make this thing make more 

sense from a logical basis. 

Senator COLEMAN. Let me have Mr. Stana first, and then I want 

to follow up on this point. 

One, this question of catching up, what is your best estimate of 

our capability to catch up? 

Mr. STANA. It is going to take years at this rate. I mean, we are 

not much further along now in hiring new people than we were 

months ago. For that reason, a couple things have to happen. They 

are going to have to prioritize which ones to validate first, and I 

would start with the importers who are receiving the greatest benefits. And yet only 7 percent of them have been validated. 

Second, I haven’t really studied Steve Flynn’s idea about going 

to the private sector or going elsewhere to get a bonded third party 

with appropriate background checks to do some of the validations. 

That approach might hold some promise. I would need to study it 

a little bit, but those kinds of auditing models are available elsewhere in government. 

But I am not comfortable in saying that a cargo container can 

move from a high-risk designation to a low-risk designation simply 

because the importer filled out the paperwork correctly and we 

don’t have any noncompliance history in our data files. I don’t 

know if that is enough in this day and age. 

Senator COLEMAN. Commander Flynn. 

Commander FLYNN. I would agree with that. I just would point 

to the Port State Control Regime that the Coast Guard uses. The 

way you close the gap is you bring third parties who have expertise 

in the supply chains, which Customs has very little of. That is not 

a skill set that is a result of being a Customs official. They are trying to build it now. Instead of hiring a lot of new government employees on this front, you build that set for oversight purposes, but 

you go out to the marketplace and you say to the importers, as a 

52

part of being C–TPAT, you have to have a third-party player who 

has verified your compliance. 

Port State Control works this way. If you are an oil tanker coming into the U.S. waters, you have to have on file with the Coast 

Guard a certificate of financial responsibility, insurance, that you 

have come in. In order to get the insurance, you have to have a 

Classification Society go on board and confirm that you live up to 

the international safety standards. Then the Coast Guard spot 

checks when the ship comes in to say, are you living up to—have 

you, based on its expertise—was that inspection done with due diligence? If it was not, the ship is held up. But every other ship that 

used that classifier is also held up. That creates the incentive for 

everybody to go to the top-shelf certifier. 

So there are ways in which the market can be used for expertise 

and to validate. Now, clearly when it is a security validation or a 

safety one, you need some liability protection, and that is why 

there will have to be a robust oversight process for this, as well. 

But the only way to close the gap, I would argue, would be to 

take this third-party model. Otherwise, it will be years and years 

and as far as we can go. 

Senator COLEMAN. And Mr. Stana, on behalf of the requestors of 

your work, Chairman Collins, Senator Lieberman, myself, and Senator Levin, I would ask you, and we will put this in writing, but 

continue to follow up on this. I think this is very important work, 

and I think we have made a lot of progress. 

And again, from the beginning, I have mentioned that we need 

to applaud the efforts that have been taken. These are steps in the 

right direction. My concern, though, is that there are still significant vulnerabilities, and even in regard to issues like validation 

and certification, I am not sure that we are speaking the same language here. I think we have to be speaking the same language so 

that we can have some consistent levels of confidence that we are 

catching the problem before it ultimately is a huge disaster. 

I also noticed that Gene Aloise, the Director at GAO, who led the 

team that produced the Megaports report is here and I want to 

thank Gene for his efforts, and again, your entire team. 

I am going to keep the record open for 2 weeks. There is additional information that we want. I want to thank everybody for 

their testimony. This has been a very productive and very informative hearing. 

With that, this hearing is adjourned. 

[Whereupon, at 12:22 p.m., the Subcommittee was adjourned.] 

(53)

A P P E N D I X 


21825.001
54


21825.002
55


21825.003
56


21825.004
57


21825.005
58


21825.006
59


21825.007
60


21825.008
61


21825.009
62


21825.010
63


21825.011
64


21825.012
65


21825.013
66


21825.014
67


21825.015
68


21825.016
69


21825.017
70


21825.018
71


21825.019
72


21825.020
73


21825.021
74


21825.022
75


21825.023
76


21825.024
77


21825.025
78


21825.026
79


21825.027
80


21825.028
81


21825.029
82


21825.030
83


21825.031
84


21825.032
85


21825.033
86


21825.034
87


21825.035
88


21825.036
89


21825.037
90


21825.038
91


21825.039
92


21825.040
93


21825.041
94


21825.042
95


21825.043
96


21825.044
97


21825.045
98


21825.046
99


21825.047
100


21825.048
101


21825.049
102


21825.050
103


21825.051
104


21825.052
105


21825.053
106


21825.054
107


21825.055
108


21825.056
109


21825.057
110


21825.058
111


21825.059
112


21825.060
113


21825.061
114


21825.062
115


21825.063
116


21825.064
117


21825.065
118


21825.066
119


21825.067
120


21825.068
121


21825.069
122


21825.070
123


21825.071
124


21825.072
125


21825.073
126


21825.074
127


21825.075
128


21825.076
129


21825.077
130


21825.078
131


21825.079
132


21825.080
133


21825.081
134


21825.082
135


21825.083
136


21825.084
137


21825.085
138


21825.086
139


21825.087
140


21825.088
141


21825.089
142


21825.090
143


21825.091
144


21825.092
145


21825.093
146


21825.094
147


21825.095
148


21825.096
149


21825.097
150


21825.098
151


21825.099
152


21825.100
153


21825.101
154


21825.102
155


21825.103
156


21825.104
157


21825.105
158


21825.106
159


21825.107
160


21825.108
161


21825.109
162


21825.110
163


21825.111
164


21825.112
165


21825.113
166


21825.114
167


21825.115
168


21825.116
169


21825.117
170


21825.118
171


21825.119
172


21825.120
173


21825.121
174


21825.122
175


21825.123
176


21825.124
177


21825.125
178


21825.126
179


21825.127
180


21825.128
181


21825.129
182


21825.130
183


21825.131
184


21825.132
185


21825.133
186


21825.134
187


21825.135
188


21825.136
189


21825.137
190


21825.138
191


21825.139
192


21825.140
193


21825.141
194


21825.142
195


21825.143
196


21825.144
197


21825.145
198


21825.146
199


21825.147
200


21825.148
201


21825.149
202


21825.150
203


21825.151
204


21825.152
205


21825.153
206


21825.154
207


21825.155
208


21825.156
209


21825.157
210


21825.158
211


21825.159
212


21825.160
213


21825.161
214


21825.162
215


21825.163
216


21825.164
217

Æ


21825.165